Mukesh Ambani now turns his attention to gigafactories

The Reliance group has a history of being ahead of the curve in most businesses. It was ahead of the curve in tapping the huge potential in petrochemicals in India and across the world, more than 30 years back. Reliance also pioneered the largest oil refinery. When it looked like the Reliance group would remain a cash cow and milk its oil and petchem business, it made two massive forays. One was into the retail space and the other into telecom and digital. Today, Reliance is not only the largest in retail by a margin but also the largest telecom and digital player in India. For the head of the group, Mukesh Ambani, it is perhaps time to shift priorities. His next focus is on building gigafactories.

In short, Mukesh Ambani would be focusing his attention substantially on the group’s pivot to green energy. He has already drawn classification lines and distributed the retail and digital business between his children. His younger son will take charge of new energy, but that is too vast and too untested and that is where Mukesh Ambani would focus most of his attention in the coming years. Mukesh Ambani’s focus would be largely on overseeing strategy and he would be supervising the building of gigafactories and blue hydrogen facilities. Mukesh Ambani will also get involved on the inorganic growth side and will assess acquisition targets and be in touch with potential investors, including PE funds.

In the last year AGM of Reliance Industries, Mukesh Ambani had unveiled an aggressive plan to spend $75 billion on clean energy projects over a period of 15 years. When it comes to manging mega projects, there are few who can beat Mukesh at the game. He was personally involved in setting up the petrochemical refinery and much later, he was also actively involved in the setting up of the telecom and digital operations of Reliance Jio. For now, his attention is focused on value addition in green energy. That puts the Reliance also on the same pace with respect to green energy as another famous businessman from Gujarat, Gautam Adani, has also laid out. That will be the competitive landscape in the coming years.

A project of such magnitude and complexity needs a virtually endless source of funds. Currently, Reliance has been seeking billions of dollars of investments into India's energy sector. They are already in touch with the cash-rich sovereign funds in the Middle East to infuse equity into these futuristic businesses. In a sense, the focus for Mukesh Ambani right now is to massively disrupt the alternate green energy sector, in much the same way that the group had disrupted the telecom and digital space in India. The grand plan for Reliance group that Mukesh Ambani is now working on is to own each and every link of the renewables supply chain and the value chain so that it can enhance margins.

Needless to say, Mukesh Ambani has the deep pockets, ability to attract investors and also the appetite and the risk taking capacity that few entrepreneurs in India really have. It spent $50 billion in its Jio digital project but surely did come out trumps in the process. Few business houses would have been adventurous enough to raise $20 billion for its digital venture at the peak of the pandemic. But, that is exactly what Ambani attempted and also managed to achieve it with aplomb. The big question is whether Reliance can literally repeat that success story in green energy too?

These may be early days, but with a market cap of $206 billion and an investment commitment of $70 billion; Mukesh Ambani is poised to play big stakes. Green energy is one segment where the larger than life personality of Mukesh Ambani would continue to dominate the Indian business scenario.