Next step for Reliance Retail is probably to have global footprints: Mahantesh Sabarad, ET Retail

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Mahantesh Sabarad, Independent Market Expert in a chat with ET Now after Reliance Industries’ 46th AGM, says “all three of Mukesh Ambani’s children have been in the Reliance environment and worked hands-on on various aspects of the business. They have seen and actually sown the growth of the new age Reliance that we are seeing and therefore, I see this transition coming in at an appropriate time. With most of the capex done on the three verticals to make it future ready, I expect Reliance to start reaping the benefits of that capex in years to come.”

Now that Mukesh Ambani is into his late 60s, he is going to remain chairman for another five years. How do you see his succession plan getting executed in phases over the next five years with the growth that Reliance envisages in their diverse businesses?
Firstly, Mukesh Ambani has already mentioned that he will act as a mentor to the new directors, his daughter and his sons and that mentoring will probably last for another five years. He is going to continue to remain the chair at the helm of the FIS for the next five years so that mentoring activity will continue. To answer your question, therefore, the mentoring process will continue as it is. I am not taking away credit from all three of them that they have been in the Reliance kind of environment and worked hands-on on various aspects of the business. They have seen and actually sown the growth of the new age Reliance that we are seeing and therefore, I see this transition coming in at an appropriate time and it is fairly smooth. With most of the capex done on the three verticals to make it future ready, I expect Reliance to start reaping the benefits of that capex in the years to come.

But with that 1% stake sale in Reliance Retail to Qatar Investment Authority, how do you see their brick and mortar as well as their e-commerce industries? How do you see them taking shape and form under the leadership of Isha Ambani and her millennial talent, as it were?
The retail business has done wonderfully well. As it is, almost half of Reliance’s consolidated revenue now comes from the consumer side of the business, which is essentially retail, Jio, etc. Those are well-seeded business verticals. With Qatar Investment Authority coming in, I suspect, the next step would be Reliance trying and aiming to grow beyond the retail presence in India and probably have a global footprint.

So, my reading of the entire things that are happening at Reliance with Jio coming in roughly about eight odd years ago to the retail business and rapidly growing now with 18,000 stores is large enough for a country like India already and therefore the next step there would have to be a bit global. We will soon hear about global footprints coming in. Therefore you might envisage a joint venture or a strategic partner coming in, QIA would enable that process.