(Bloomberg) — After raising more than $20 billion for his digital venture in three months, billionaire Mukesh Ambani is readying his retail unit for global partners, as his oil-to-petrochemicals conglomerate turns to India’s billion-plus consumers for growth.
Asia’s richest man and the chairman of Reliance Industries Ltd. told shareholders Wednesday that Reliance Retail Ltd. is getting inquiries from investors and may start bringing some on board in the coming months. The legacy petrochemicals business is also getting attention from potential investors even though a proposed stake sale to Aramco isn’t proceeding as planned, he said.
“We’ve received strong interest from strategic and financial investors in Reliance Retail,” Ambani told the 300,000-plus people who logged into the virtual conference from 41 countries. “We will induct global partners and investors in Reliance Retail in the next few quarters.”
The 63-year-old tycoon has identified technology and retail as future growth areas in a pivot away from the energy businesses he inherited from his father who died in 2002. Retail is the next frontier for Ambani, who just finished selling almost 33% of his digital venture over the past three months to a slew of investors including Silicon Valley giants Facebook Inc. and Google, valuing Jio Platforms Ltd. at $58 billion.
Reliance Retail, which runs supermarkets, India’s largest consumer electronics chain store, a cash and carry wholesaler, fast-fashion outlets and an online grocery store called JioMart, reported 1.63 trillion rupees ($22 billion) in revenue in the year through March 2020. The unit operates almost 12,000 stores in nearly 7,000 towns.
Although Ambani laid out a vision for a technology future for Reliance Industries at the shareholders meeting, shares of the conglomerate slumped. The tycoon confirmed that a planned sale of stake in Reliance’s oil-and-chemicals division to Saudi Arabian Oil Co. for an estimated $15 billion hadn’t progressed as planned, disappointing investors.
Frenzied Fundraising
The stock fell 3.8% Wednesday, its biggest loss since May 14, paring gains from a rally spurred by the frenzied fundraising by Jio. The drop shrank Ambani’s net worth to $69 billion, according to the Bloomberg Billionaires Index, pushing him down the rankings to the world’s 10th richest. Earlier this week, he had briefly rocketed to No. 6, past Elon Musk, Warren Buffett and Google co-founders Sergey Brin and Larry Page.
Most of Ambani’s focus during the 93-minute presentation to shareholders was on technology. He, along with his children Isha and Akash Ambani, unveiled a slew of services, including a fifth-generation wireless network as early as next year and a mega video-streaming platform that will bring Netflix, Disney+ Hotstar, Amazon Prime and dozens of other TV channels under one umbrella. The twins, who have been at the forefront of the fundraising efforts, also demonstrated some of the technologies.
“I believe that the time has come for a truly global digital product and services company to emerge from India, and to be counted among the best in the world,” Ambani said.
Read more: Can Ambani Take on Tencent, Huawei and Xiaomi?: Andy Mukherjee
Jio Platforms, unveiled last year, is now at the center of his ambitions to tap a billion Indians increasingly embracing mobile devices and data plans to shop online. Jio is eyeing an opportunity to shake up retail, content streaming, digital payments, education and health care.
Giant Rivals
Those plans would put Jio in direct competition with e-commerce giant such as Amazon.com Inc. and Walmart Inc.’s local operations. Alphabet Inc.’s Google is the latest to join Jio as an investor, with Wednesday’s announcement of a $4.5 billion investment for a 7.7% stake.
“Each of the new hyper growth engines have high customer acceptance opportunity with scale, and will be multiple times current valuation, making the traditional oil and gas business a less than 20% contributor to valuation going forward,” said Chakri Lokapriya, chief investment officer at TCG Asset Management in Mumbai.
Jio, which started out as a wireless carrier as its first building block back in 2016, will roll out its 5G network once airwaves are available, according to Ambani. Unlike most other carriers, Jio will use a technology developed in-house for 5G, Ambani said, leaving it immune to pressures many global telecommunications companies are facing from the U.S. over Chinese equipment vendors.
Here are some of the plans laid out by Ambani:
Google and Jio are partnering to build an Operating System that could power a cheap 4G/5G smartphone.JioMart, the online shopping portal, and WhatsApp will be working closely to create growth opportunities for millions of Indian small merchants and enable customers seamlessly transact with mom-and-pop storesJio Glass to bring teachers and students together in 3D virtual rooms and conduct holographic classes through our Jio Mixed Reality cloud in real-timeBroadband for enterprises and small businesses; Narrowband Internet-of-Things (NBIoT)
(Updates with slide down the wealth rankings in seventh paragraph)
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="For more articles like this, please visit us at bloomberg.com” data-reactid=”51″>For more articles like this, please visit us at bloomberg.com
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Subscribe now to stay ahead with the most trusted business news source.” data-reactid=”52″>Subscribe now to stay ahead with the most trusted business news source.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
