Reliance‘s Grand Stage Is Set

Come Monday and all eyes and ears will turn to Reliance and the Ambani family, as the conglomerate’s annual general meeting will more or less give us a peek at what 2023 and 2024 might hold for India’s digital economy.

Reliance Retail and Jio Platforms have taken on a new dimension in the past 18 months, with forays into several new verticals. While Jio 4G catalysed the internet ecosystem and startups at large, the launch of 5G has coincided with Reliance’s biggest push into the digital economy. Of course, at this very moment, the full attention is on Jio Financial Services, which threatens to disrupt the fintech sector.

So much so that Reliance is essentially big tech now and for that reason alone, its moves will not just dictate the direction of the conglomerate but also could be game-changing for startups (not in a good way) and the digital economy.

We take a look at what the Reliance 2023 AGM is likely to have in store, but after these top stories from our newsroom:

• Spacetech’s Chandrayaan-3 Moment: What does ISRO’s historic Chandrayaan-3 success story mean for India’s spacetech ecosystem? Here’s what the overjoyed sector has to say
• Finally, 1st Unicorn Of 2023: Mumbai-based Zepto became India’s 111th unicorn and the first in nearly a year after raising $200 Mn in its Series E funding round at a $1.4 Bn valuation
• Move Over, IITs: Unicorn founders are no longer only hailing from IITs and IIMs and the rise of non-IIT talent shows that tech talent is going through democratisation

Reliance’s Big Day

In a matter of hours, Reliance chairman Mukesh Ambani, Reliance Jio chairman Akash Ambani and Reliance Retail head Isha Ambani will take the stage to reveal the big plan for the months to come. The AGM track record indicates that Reliance will announce new partnerships and the roadmap for key businesses.

For instance, in 2020, RIL proclaimed some major investments in its new energy business. It was also the year when RIL announced Google’s massive investment of $4.5 Bn in Jio Platforms. In 2021, Alphabet CEO Sundar Pichai made an appearance to announce a 4G-enabled smartphone called JioNext and Google Cloud’s partnership with Jio for 5G.

Of course, last year was all about 5G, the foray into the FMCG business and a bigger push into electronics manufacturing. What’s in store in 2023?

Jio Vs Fintech Startups

The biggest expectation from the AGM is around Jio Financial Services (JFS), which is definitely set to give fintech players some sleepless nights. So far, Jio’s telecom disruption has been lauded as a major catalyst for consumer and B2B fintech, but Jio is now stepping directly into the arena posing a threat to many startups.

JFS was demerged from RIL in July and listed earlier this month. JFS also tied up with the world’s largest asset manager BlackRock to take a bet on India’s $540 Bn mutual fund industry dominated by the likes of SBI, ICICI, and HDFC along with startups such as Zerodha, and Groww.

But Ambani is likely to lay down the plans for the B2B credit business, which is expected to come out first, followed by consumer lending. The big plan is to use lending as a funnel to venture into insurance, digital broking and asset management, pretty much like most other fintech startups.

In the past, Mukesh Ambani has said that the financial services play will leverage the technological capabilities that Reliance has built up since before its 4G launch.

Fintech analysts told Inc42 that JFS will be the biggest disruption in the fintech space because no other company can match the breadth and depth of services that Reliance has to rely on.

“Startups only have fintech, but Reliance has first-party data for retail transactions and ecommerce. It also has the data from its telecom business and now also first-party mobile devices. Plus it has the weight of Reliance behind the operations,” says the founder of a Bengaluru-based neobanking startup.

JFS has already had an impact on the competition, even without much depth of operations right now. Soon after the public listing, shares of fintech giant Paytm witnessed some weakness in between a rally.

So far, JFS has not had the best of starts in the share markets. The stock’s price rose on Friday last week, after hitting the lower circuit earlier for five sessions. It will be interesting to see how the market reacts to the big reveals.

For fintech startups, it will be a nervous watch, given that JFS can also lean on the twin pillars of Reliance Retail and Jio, which have also evolved quite a lot in the past year or so.

Reliance Retail IPO Incoming?

Another important story to watch out for during the AGM would be the timeline for the listing of Reliance Retail Ventures Limited (RRVL). It looks like the groundwork for the IPO is already laid as Qatar Investment Authority bought a 1% stake in RRVL for INR 8,278 Cr ($1 Bn) at a valuation of $100 Bn.

Reliance Retail is expected to sell up to 10% more stake in the run-up to the IPO to dilute the promoter stake. Experts believe that RRVL’s IPO size will be too big for the Indian stock markets at its current valuation of $100 Bn.

It will be interesting to see how Reliance Retail continues unlocking the value in the company as it looks to navigate the bearish market. The company operates an omnichannel retail and ecommerce network of more than 18,500 stores combined with ecommerce platforms for grocery, consumer electronics, fashion and lifestyle, and pharma segments.

Digital and new commerce businesses contributed 18% to the total revenue of Reliance Retail in Q1 FY24, with a net profit of INR 2,448 Cr. While the retail arm’s grocery business grew 59% year-on-year (YoY), its consumer brands vertical saw an 8X jump in revenue YoY.

With the fundraise, RRVL will go all-in on the consumer brands business and enter new product categories as it did in the past year with the ‘Independent’ brand.

The Rise Of JioCinema

As for Jio Platforms, the road to IPO is less certain. The company is likely to wait and give more attention to JFS and Reliance Retail, even as it deepens the 5G network.

Market observers believe that the biggest game changer could come in the form of Jio AirFiber, the company’s fixed wireless access device for retail consumers, where it is targeting an install base of 100 Mn homes. This is expected to bring Jio on par with Airtel and also boost the company’s ARPU, which has long suffered from slow growth as the telco prioritised scale over revenue.

The telecom market leader has also bet big on 5G mobile devices, with two smartphones said to be in the pipeline. The company is likely to bundle 5G at aggressive prices with these phones.

Eyes will also be on how Jio’s digital services and products have grown in the past year. We expect a lot of attention on JioCinema, which skyrocketed in popularity after the IPL deal earlier this year and the FIFA World Cup last year.

Since then, JioCinema has added the largest original slate in the Indian OTT space, outproducing the likes of Netflix, Amazon Prime and others. Besides making the IPL free, the platform is the official partner for HBO and NBCUniversal in India.

JioCinema’s parent company Viacom18 has roped in Google’s Kiran Mani as the CEO for the digital business according to reports, besides former Disney exec Kevin Vaz as CEO of TV and digital (regional entertainment). Another Disney alumni Alok Jain is overseeing regional content on digital platforms, with Anil Jayaraj, ex sales head of Star Sports, as CEO of the sports vertical.

The AGM is likely to highlight just how JioCinema has grown in the past eight months. Today, JioCinema charges INR 999 a year for the premium service and in the long run, the OTT business could become a big bulwark for Reliance’s sprawling media business.

Reliance As ‘Big Tech’

All in all, come Monday, a lot more will become clear about how Reliance plans to tackle the rest of FY24. It’s clear that after laying the foundation for the internet economy with the Jio telecom disruption, the company is now eyeing a bigger piece of the market.

For many startups, Reliance was the enabler, but now it’s a rival. Take the likes of Myntra or Nykaa in the beauty and fashion ecommerce space, or Tata-owned BigBasket and others from the JioMart POV.

Now, the time has come for fintech startups to brace for a rivalry with Reliance, and even the global streaming giants.

These are the times of Reliance as a Big Tech company and pretty much no other tech giant in the world has its hands in as many businesses as Reliance. Based on what we expect to see at the 2023 AGM, this reputation is only going to get stronger.

Startup Spotlight: Gen AI Startup Looks To Ease UI Development

Having seen the pains of UI development for early stage product and services startups, former Mindtickle executives Dipanjan Dey and Abhijit Bhole decided to leverage the power of generative AI to fix this major headache.

The duo want to change how frontend developers approach UI design with Kombai. Generative AI has opened up a whole range of new models, and the startup’s product is claimed to interpret visual design cues like humans and has the ability to write code accurately for frontend development.

Dey and Bhole set up Kombai in 2022 and since then it has been a 16-month journey to develop the right frameworks for the product’s generative AI model, from scratch. As the founders claimed, they wanted to ‘bring fun back to frontend development’.

Read The Kombai Story

Sunday Roundup: Startup Funding, Tech Stocks & More

• Funding Rebound? With Zepto’s massive $200 Mn unicorn round, the weekly startup funding saw an uptick — a total of $231 Mn was raised across 16 deals.
• Profit-Booking? SoftBank is looking to sell Zomato shares through block deals as the stock has seen a rally in recent weeks, and same is the case with AntFin, which is looking to sell 3.6% of its stake in Paytm

• Bengaluru & AI: Karnataka IT minister Priyank Kharge has claimed that Bengaluru has turned into a global AI hub thanks to the state’s investments and push for AI startups
• Bringing Unicorns Back Home: More than 20 out of 111 unicorns in India currently have their headquarters outside India. What will it take to bring these value-creators back home?
• D2C Summit Is Almost Here: Join Inc42’s D2C Summit later this week to network and learn from the likes of boAt’s Aman Gupta, Nykaa’s Adwaita Nayar; Curefoods’ Ankit Nagori, Miyntra’s Nandita Sinha and others

That’s all for this week. We will see you next Sunday with another weekly roundup, and till then, you can follow Inc42 on Instagram, X/Twitter and LinkedIn for the latest news as it happens.