Andy Mukherjee: For Reliance, it’s all hands on deck as the group charts its future

The 68-year-old patriarch, whose processing of discounted Russian oil seems at the heart of fraying US-India ties, needs all the support he can get. US President Donald Trump has sanctioned the most-populous nation with exorbitant 50% tariffs, allegedly for feeding Russia’s war machine. US officials have not directly accused Ambani. But when White House trade advisor Peter Navarro made a bizarre reference to the Ukraine conflict as “Modi’s war," he puts the largest single buyer of Russian oil in India in a pickle.

Also Read: Andy Mukherjee: Why imports of American gas by Reliance make all-round strategic sense

“I assure our respected prime minister that Reliance will follow his command with redoubled efforts," Ambani said at the AGM. That show of solidarity with Modi’s call for self-reliance is along expected lines. To say anything else may mean losing political influence. At the same time, though, Ambani can’t afford to annoy the US, which his conglomerate needs more than ever for capital and technology to break into the big league: $1 trillion-plus market valuation. A strategy to weather the squall began to emerge at the annual shareholder meeting last week.

Ambani’s older son, Akash, has been tasked with delivering a mega IPO of the group’s digital services business, the world’s largest data firm with 500 million customers. During the pandemic, Alphabet’s Sundar Pichai and Meta’s Mark Zuckerberg were among the tech titans who pumped $20 billion into Jio Platforms Ltd. An IPO by June would strengthen the case for their further entanglement. Both made cameo appearances at the Friday event to back Ambani’s upcoming investments in AI. Google will provide cloud infrastructure, while a $100 million joint venture with Meta will develop AI solutions for local enterprises.

Also Read: Transformer by Mint | Can Mukesh Ambani pull off a ‘Jio moment’ for AI?

The Saudi wealth fund is an investor in both Jio and Reliance Retail. The biggest Indian retailer is not yet IPO-ready, but Isha Ambani, Akash’s twin sister, is building a consumer goods company that will eventually make the stuff that sells on Reliance’s shopping network. That’s where the media partnership with Disney, with 300 million paid subscribers and a near-complete lock on cricket, would come in handy as an advertising vehicle. Disney boss Bob Iger, too, sent in a video message for Reliance shareholders. 

However, the media business won’t be just about entertainment and commerce. New Delhi has long yearned for its own version of Qatar’s Al Jazeera, a tool to influence global opinion and signal India’s rise. Ambani is promising to step in to fulfil that ambition with news bureaus in major world capitals. This, too, is a message of support to New Delhi, which needs to find its way back into Washington’s strategic orbit even as it normalizes ties with Beijing. It’s also a timely move from a competitive standpoint. The rival Adani group’s legal troubles in the US are making it hard for it to beef up its international clout. 

Also Read: RIL AGM 2025 | Will Mukesh Ambani’s green push catch up with Adani’s head start?

The most crucial project, however, has been given to Anant Ambani. The youngest scion has to attract the capital that Trump no longer wants for US solar and wind projects and create a renewables unit as big as Reliance’s oil-to-chemicals business in five to seven years. It won’t be easy to replicate a refinery operation that has churned out billions. The question is if the 30-year-old, who came to the AGM podium for the first time on Friday, can execute such an audacious pivot. The Adani Group, which has similar plans, will put up a tough fight. 

Here, the friends who attended any part of Anant Ambani’s wedding celebration last year might prove helpful. Among them is Yasir Al-Rumayyan, governor of the Saudi fund and a Reliance board member, is also the chairman of Saudi Aramco. The state-run oil producer had come close to investing in Reliance’s refinery in 2019. The deal fell apart two years later. Why not put it back on the table? A changed geopolitical landscape and the Saudis’ proximity to the Trump administration may offer a chance to direct Reliance away from Russian oil and towards West Asian crude and US gas, particularly ethane.

 A lacklustre stock price suggests that investors are sceptical of Ambani’s pledge to transform Reliance into a “deep-tech company." To prove naysayers wrong, now may be the time to dial down the group’s visibility. For the company, it’s truly all hands on deck.  ©Bloomberg

The author is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia.