The Future of Reliance: A New Era of Growth or a Decline?

Chairman and MD of Reliance Industries Ltd., Mukesh Ambani, inaugurated the group’s Annual General Meeting (AGM) on August 28th, 2023. It was the 46th AGM of the group, and it held additional importance in the history of Reliance due to multiple developments. One significant change was the addition of three new members to the board of RIL: Isha, Akash, and Anant Ambani.
Mukesh and Nita Ambani’s daughter and sons were welcomed as they contributed to raising the Ambani family’s control in the group. Now, 6 Ambanis & relatives are gracing the Reliance Group’s board with their presence. All have an equal holding of 0.12%, apart from Founder Dhirubhai Ambani’s wife Kokilaben, who holds 0.24% in the group. Alongside this, 66-year-old Mukesh Ambani recently received a special 5-year term extension for his position in the group.

Reliance is India's most valuable and well-known company, with a market capitalisation of ₹16.57 trillion. The company, with varied businesses in different market sectors, including retail, energy, beauty, telecom, and more, has multiple plans in motion for world domination. In Mukesh Ambani's words,

 “New Reliance has been a forerunner of the emerging new India.”

                                                                                                            -At RIL’s 46th Annual General Meeting

Everything is looking elated from Ambani’s rose-tinted glasses, but what about others?

Involving more members of the family in the group as Directors means more power in the Ambani family’s palms. This can be a source of difficulty when it comes to corporate governance. Plus, it also gives birth to a worrisome situation for other shareholders and investors as family-controlled businesses like Reliance have a LOT of baggage!

In this article, we will observe the potential difficulties awaiting the conglomerate with the addition of Ambani’s 3rd generation. As well as discuss the implications of Ambani’s plans for the group in combination with his children’s futures.

You must be wondering, “What’s in it for us?” Well, those who already have RIL shares in your portfolio and those who are watching the company with plans for the same will find crucial information for the company’s future. Knowing the ins and outs of the company would help you make smart decisions as an investor.

So, let's start this expedition with the man of the hour, Mukesh Ambani’s ⬇️

Reappointment in the Group

Founder Dhirubhai Ambani's son, Mukesh Ambani, is the driving force behind the success of Reliance Industries. He has proved multiple times how he can change the tide when the situation calls for it. From managing the family drama with brother Anil Ambani for Reliance Companies' partition to the legal issues their feud brought, Mukesh Ambani took care of things efficiently.

With his efforts, Reliance Industries is leading in terms of revenue, profit, export, market value, and other criteria. The latest annual report for FY 2022-23 portrays the story of the group's success with a 23.6% hike in revenue and a consolidated EBITDA of ₹1,53,920 crore.

The rising numbers and multiple achievements in different companies under the group led to the reappointment of Mukesh Ambani as the ringmaster for another 5 years. Ambani received a term extension via a Special Resolution as the Chairman and MD.   

As mandated by the Companies Act 2013, Section 196(3)(a) dictates that the age of a company's directorship should not be under 21 years or over 70 years.

Despite this, Mukesh preserved his position in Reliance Group from 2024 to 2029. And our guy is 66 years old. No kidding!

Mukesh Ambani be like 👇