One of India’s largest conglomerates may become a holding firm with three large subsidiaries, oil to chemicals, retail and Jio
Reliance Industries (RIL) chairman Mukesh Ambani decision to carve out oil-to- chemicals (O2C) business into a separate entity and induct strategic partners for consumer-facing businesses of retail and telecommunications before listing is seen a precursor of RIL’s long-term succession plans.
During the company’s annual general meeting (AGM), a shareholder asked RIL chairman Mukesh Ambani to make throw light on succession planning at the conglomerate.
“This is in regard to succession planning. From Akash, Isha and Anant, who will be leading which business? How is the succession going to take place?” asked the shareholder.
However, Mr. Ambani did not give a direct reply. He said, “I deeply appreciate the suggestions given by shareholders. Any individual query or specifics will be answered by our company secretary.
“We take every suggestion very seriously. Some of the best suggestions come from all of you. The board has noted your expectations and we will try to meet your expectations.”
Mr. Ambani (62) knows well the pitfalls of not having a clear succession plan and hence, has already started taking baby steps towards succession planning.
“I don’t think [Mr.] Mukesh Ambani will commit the same mistake his father Dhirubhai did. The carving out of three big businesses hints at a possible succession plan in the making, given that he has three children,” said a Mumbai-based analyst.
In fact, Mr. Ambani may have started thinking of succession planning in 2014 itself, when his son Akash and daughter Isha joined the boards of Reliance Jio and Reliance Retail as directors.
Size does matter
Since then, both Reliance Retail and Reliance Jio had grown to become India’s largest retailer and largest telecom company, respectively Both Akash and Isha are very hands-on when it comes to retail and telecom, sources said.
“They also address shareholders every year and introduce new products and services. There is no doubt that they are going to take hold of the reins of the companies in the coming years,” said an RIL shareholder.
“I still think Mr. Ambani has a long way to go. He is imaginative and far-sighted. It’s very wise on his part that he is trying to place all three [in the business] given that there has been a problem historically.
“[However] we have to wait and watch to see who gets what,” Sanjiv Bhasin, executive vice-president, IIFL Securities, told The Hindu.
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