|Bid||0.0000 x 0|
|Ask||0.0000 x 0|
|Day's Range||1.6000 - 1.6500|
|52 Week Range||0.6000 - 3.4500|
|Beta (5Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Earnings Date||Feb 12, 2021 - Feb 16, 2021|
|Forward Dividend & Yield||N/A (N/A)|
|Ex-Dividend Date||Aug 14, 2013|
|1y Target Est||17.00|
(Bloomberg) -- Billionaire Mukesh Ambani obliterated rivals in India’s telecommunications sector by selling $2 data plans and free voice calls. Four years later, he’s deploying a very similar tactic -- cutthroat pricing -- to gain an edge in the country’s increasingly competitive e-commerce space.As India this week hits the peak of its biggest shopping season, the festival of Diwali, the tycoon’s retail websites -- including JioMart -- are elbowing their way into a space long dominated by Amazon.com Inc. and Walmart Inc.’s local unit Flipkart Online Services Pvt.Ratcheting up competition, Ambani’s portals are offering blockbuster discounts of as much as 50% on popular sugary confections and other holiday staples like spice mixes for India’s rice delicacy, biryani. Meanwhile, his Reliance Digital website is selling some flagship Samsung smartphones at prices cheaper than rivals, with as much as 40% rebates.It’s a push that comes as Ambani’s sprawling conglomerate, Reliance Industries Ltd., is flush with cash and has seen its shares rally about 35% this year. After raising an eye-popping $20 billion for its technology venture, it’s shifted fundraising to its retail arm, which has won over $6 billion in investment in recent weeks from heavyweights like KKR & Co. and Silver Lake. Already India’s biggest brick-and-mortar retailer, Ambani’s online ambitions pit him against the two U.S. giants, both of which have invested big in India.The country, one of the last big consumer markets, is still up for grabs, and Morgan Stanley estimates that India will generate $200 billion in e-commerce sales by 2026. Yet, the billionaire’s triumphs in telecommunications -- where he started as a tiny player, but outpaced established rivals by undercutting them on price and capitalizing on regulatory changes -- are a cautionary tale for the American giants.Huge EdgeIn retail, Ambani’s firm has a huge edge: Government policies are increasingly stacked in favor of domestic retailers, of which Reliance is the largest. Since the end of 2018, India’s foreign investment rules have also barred Amazon and Walmart’s local unit Flipkart from featuring exclusive products and owning inventory, in a bid to restrict their ability to directly influence prices and offer discounts. International companies aren’t allowed to own more than 51% of local brick and mortar supermarket chains. Even that limit is subject to conditions such as setting up only in cities with populations of less than 1 million.With his local strategy, low-cost procurement and chain of brick-and-mortar stores, Ambani has the ability to shake up online retail, said Siju Narayan, Chief Experience Officer, RexEmptor Consult LLP in Mumbai. “JioMart can dent the fortunes of grocery e-commerce majors like Bigbasket & Grofers,” he said, referring to the country’s biggest online grocers. “And impact the grocery, home & personal care category of e-tail majors like Amazon and Flipkart in coming days.”Representatives for Reliance and Bigbasket declined to comment, while those for Walmart, Amazon and Grofers didn’t respond to requests for comment.Tweaked RulesAmbani’s success in telecom shows his ability to benefit from pricing and policy. India’s government tweaked rules in 2013 to create a “unified license” that allowed operators with a broadband wireless permit to offer voice calls by paying a one-time fee. Only one operator had such a permit nationwide at that time – Reliance Jio. The new rules helped it move swiftly.After receiving a unified license and rolling out Reliance Jio’s telecom services in September 2016, Ambani sold voice and data plans at rock bottom prices. That made digital services more affordable for millions of Indians. Although rivals won similar licenses, some went bankrupt amid the ensuing price war, including his younger brother Anil’s Reliance Communications Ltd. Non-state operators in telecommunications eventually dropped to three from at least a dozen. Jio turned profitable in 2018. It’s currently India’s biggest wireless operator with over 400 million subscribers.High StakesIn India, the stakes are high for the American retailers. Jeff Bezos, Amazon’s hard-charging founder and chief executive officer, has pledged to invest $6.5 billion there. Walmart spent $16 billion in 2018 to acquire Indian portal Flipkart in its biggest ever deal, and has invested over $1 billion this year in the e-tailer and steadily plowed cash into its sister unit, payments service PhonePe.But for Ambani, 63, Asia’s richest man with a net worth of $79 billion, the e-commerce push may turn out to be tougher than telecom. First, he will be up against formidable rivals. The wireless operators he defeated were mostly homegrown players, lacking the heft, experience and deep pockets of Amazon or Walmart. Also his group’s e-commerce websites are newer compared to its rivals’.Reliance group’s JioMart – which only started this year and is still in the beta phase – has had delivery snafus and refund delays, and some users haven’t been shy about venting on Twitter. All that means winning big against Walmart and Amazon could take years.Future BusinessYet, getting it right is key because Ambani has cast retail and technology as the future of Reliance, which got its start in textiles under his father and then progressed into petrochemicals and oil refining. Two of his oldest children, Ivy-league educated twins Isha and Akash, are on the board of Reliance Retail Ventures Ltd.Reliance is already India’s biggest company and its market capitalization of $179 billion equals about 6.4% of India GDP. Its heft would only increase if it wins a greater foothold in e-commerce -- something that’s increasingly becoming important in India, which has suffered a lockdown for much of the year due to the pandemic and where organized retail is yet to penetrate rural corners.The pandemic is offering a boost to Reliance because many local stores can’t offer aggressive discounts due to financial difficulties, said Laiji Varghese, who runs a provision store in Nerul, a town in the outskirts of Mumbai, and has a partnership with Reliance to deliver orders.“Reliance Retail is a big bulk player with deep pockets,” she said. “They have the financial muscle to offer such discounts compared to others.”Samsung PhonesFor Diwali, JioMart has a “Bestival Sale” on and has been touting the “season’s biggest grocery sale” with large discounts and cashback running through Nov 8. Flipkart and Amazon are also showcasing a slew of discounts, putting the three companies neck to neck.Yet on some key items, Ambani’s sites are offering bigger price cuts. A Samsung S20, this year’s flagship model from the world’s biggest smartphone maker, for instance, was going for 43,999 rupees at the start of this week on Reliance Digital. The same phone on Amazon’s India website was available for 47,990 rupees and on Flipkart for 69,999 rupees.Regardless of who draws more customers and offers the biggest price cuts this holiday season, a pitted, protracted battle for India’s online shoppers is likely to play out in the coming years.Complex RestrictionsDespite the complex pricing restrictions that Walmart and Amazon face in India, they have been able to showcase discounts offered via manufacturers and brands. In some cases, they are able to restructure their relationships with sellers so they can legally offer price cuts, and have allied with banks and credit card companies, which are allowed to offer deals that give shoppers price benefits on websites.Yet, in the long term, pricing rules favoring local companies would allow Ambani’s JioMart and other websites to be more nimble in tweaking costs since they are bound by fewer restrictions.JioMart and Reliance Retail account for around $12 billion of India’s retail market combining brick and mortar and digital sales, according to Ankur Bisen, senior vice president and head of Technopak’s retail consulting division. Meanwhile, Amazon and Flipkart, leveraging their pure online plays, can claim about $14 billion each, he said.Although Amazon and Walmart are far ahead in online retail, a winner will need to straddle both domains, physical and virtual, to cater to India’s diverse and heavily rural geography. Yet the restrictions on foreign companies owning grocery stores, puts them on a backfoot. That’s in keeping with Prime Minister Narendra Modi’s goal of nurturing home-grown champions. Across the border, China’s protection of domestic companies has created technology behemoths like Alibaba Group Holding Ltd. and Tencent Holdings Ltd.Ambani has built his businesses with a decades-long understanding of India’s bargain-hungry consumers. Over the years, he’s also aligned Reliance’s own ambitions with government goals across different administrations. In 2016, when he launched Reliance Jio, the telecom business, he promoted it as part of Modi’s Digital India initiative.India’s Alibaba“Narendra Modi has clearly decided that he wants to produce an Indian equivalent of Alibaba or Tencent, and he knows Reliance is the only plausible candidate,” said James Crabtree, an associate professor of practice at the Lee Kuan Yew School of Public Policy at the National University of Singapore, author of The Billionaire Raj, which chronicles India’s economic opening and has Ambani’s much-storied Mumbai home on its cover.To cement his position as the nation’s No. 1 retailer, Ambani bought the retail, wholesale, logistics and warehousing units of Future Group for $3.4 billion in August. Amazon, which owns a tiny stake in one of the unlisted firms under the Future Group, has sought to block the sale in an arbitration court. Reliance, meanwhile, said it intends to complete the transaction without any delay.“It’s a head-on competition in online retail,” said Devangshu Dutta, CEO of retail consultancy Third Eyesight. “An extremely well capitalized, very aggressive player is the new challenger.”(Updates with share rally in Reliance’s shares in the fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Delhi High Court on Thursday halted insolvency proceedings against Reliance Group chairman Anil Ambani, the younger brother of India's richest man, and barred him from disposing of any of his assets. Anil Ambani, who runs a business group separate from his billionaire brother Mukesh Ambani, had filed a plea with the Delhi High Court challenging the appointment of a resolution professional over a roughly 12 billion rupee ($163 million) personal guarantee that he had given to the State Bank of India for loans to his companies.
(Bloomberg) -- Follow Bloomberg on Telegram for all the investment news and analysis you need.India’s Supreme Court ruled that wireless carriers including Bharti Airtel Ltd. and Vodafone Idea Ltd. need to pay $13 billion of dues to the government, rejecting an appeal by operators struggling to stem losses and reduce debt.A three-judge Supreme Court bench headed by Justice Arun Mishra on Thursday dismissed review petitions filed by the telecommunication companies against the October verdict, according to updates on the court’s website. Under that ruling, Vodafone Group Plc’s India venture has to pay $4 billion, while Bharti Airtel got a $3 billion bill -- all due on Jan. 24.The court also rejected requests by telecom companies for rehearing the petition seeking relaxations on penalties sought by the government and deadline for the payment.The court’s rebuff is the latest setback for the survivors of a brutal tariff war sparked by the 2016 entry of billionaire Mukesh Ambani’s Reliance Jio Infocomm Ltd., an upstart that disrupted the industry with free calls and cheap data. Both Bharti Airtel and Vodafone Idea, with a combined net debt of about $30 billion, reported record losses in the quarter through September, and were counting on the court to reverse its order.“We wonder how weaker operators like Vodafone Idea will make this payment, and not that Bharti Airtel is getting any respite as the amount has to be paid up,” said Gaurang Shah, vice president at Geojit Financial Services Ltd. “It isn’t easy to raise tariffs and retain customers. It remains to be seen how companies now respond to this decision because the court has twice spelled it out for them.”Eroding ViabilityFor two decades, the operators had challenged the way authorities calculated their annual adjusted gross revenue, a share of which is paid as license and spectrum fees. With the October ruling, the court upheld the government’s method, while rejecting the companies’ plea to exclude revenue from non-telecommunications businesses.“We are evaluating filing a curative petition,” Airtel said in a statement after the ruling. “The industry continues to face severe financial stress and the outcome could further erode the viability of the sector as a whole.”The government had raised a total demand of around 920 billion rupees ($13 billion) against all telecom operators, including defunct ones, according to filings in the court.Here’s a list of companies and the amount they have to pay to the government:Bharti Airtel recently raised $3 billion from sales of shares and convertible bonds to help meet the payment deadline. On the other hand, Vodafone Idea’s billionaire Chairman Kumar Mangalam Birla warned last month that the company would have to cease operations and head for insolvency if the government doesn’t provide relief measures.Last year, Vodafone Idea had raised 250 billion rupees from a rights issue.Vodafone’s India Unit Chairman Says End is Near If No Support“Vodafone may have some cash through rights issue but it won’t be enough to meet the overall dues,” said Rajiv Sharma, an analyst at Sbicap Securities. “If there’s not enough relief, then it is going to be a matter of time before they shut down.”In the past decade, India has seen a consolidation in the telecommunications industry. Three non-state operators are left now, from about a dozen four years ago. While Vodafone’s local unit announced its merger with Birla’s Idea Cellular Ltd. in 2017, Aircel Ltd. and tycoon Anil Ambani’s Reliance Communications Ltd. slipped into bankruptcy last year. Others including Norway’s Telenor group and UAE’s Etisalat group exited the market.(Updates with background throughout.)\--With assistance from P R Sanjai and Nupur Acharya.To contact the reporters on this story: Upmanyu Trivedi in New Delhi at firstname.lastname@example.org;Ragini Saxena in Mumbai at email@example.comTo contact the editors responsible for this story: Sam Nagarajan at firstname.lastname@example.org, ;Unni Krishnan at email@example.com, Bhuma ShrivastavaFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.