RIL shares fall during AGM as Ambani sets 2026 listing target for Jio and doubles down on AI
Reliance Industries shares slipped through the company’s 48th Annual General Meeting, finishing 2.3% lower at ₹1,355.45 on the BSE after falling nearly 3% intraday. The stock touched a four-month low of ₹1,350.30, even as the broader market was mostly steady with the Sensex down just 0.34%. The trigger was not weak business data, but how the path to a Jio listing might play out for existing shareholders.
Mukesh Ambani told shareholders that Reliance plans to list Jio in the first half of 2026, subject to regulatory approvals. It is set up to be one of the biggest market events in years. But because the company did not outline any direct benefit for current RIL shareholders—no demerger, no share distribution plan, and no explicit allocation framework—traders hit the sell button. For a stock where expectations often run high into major events, even a positive headline can disappoint if the mechanics are unclear.
The AGM also doubled as a strategy update. Ambani announced Reliance Intelligence, a new, wholly owned unit focused on building and deploying artificial intelligence across the group. He framed AI as a breakthrough platform for energy, retail, telecom, and entertainment, and said Reliance will embed AI in workflows, customer interfaces, and operations. A fresh partnership with Google aims to use AI and cloud at scale across these businesses, from process automation to personalized retail and smarter network planning.
Investors have seen this movie before. RIL shares have tended to fade after recent AGMs. Over the past four years, the stock has often slipped in the days following the meeting as packed wish lists met more measured announcements. Last year, the shares fell 4.6% in the 10 days after the AGM. The pattern does not reflect weak operations so much as hot expectations colliding with the long timelines of execution.
On the numbers, management stuck to a growth script. Ambani said RIL is aiming to double EBITDA by the end of 2027, leaning on better profitability in energy, a bigger retail footprint, continued telecom monetization, and early gains from new energy projects. The workforce has grown to 6.8 lakh and is expected to pass 10 lakh in the coming years, pointing to a scale-up that goes beyond telecom into manufacturing, logistics, and data-led services.
Jio’s operational momentum remains clear. The company rolled out 5G at record speed and has now crossed 500 million customers across its telecom and digital platforms. That base, combined with broader data usage and a push into enterprise connectivity and cloud, is central to how investors will value Jio when it lists. For now, the market wants specifics on how this value will flow—or not—back to RIL shareholders.
Despite Friday’s drop, broker models still lean bullish on a 12-month view. The average street target of ₹1,634.41 implies around 19.6% upside from the closing price. Even after the correction from July’s 52-week high of ₹1,551, the stock is up 13.6% year-to-date in 2025. The long-term call rests on whether Reliance can keep lifting returns in energy while scaling cash flows in retail and telecom, and whether the new AI push can drive tangible productivity gains instead of just headlines.
Why did the stock sell off right away? The short answer: uncertainty about the listing structure and the value bridge back to RIL. In plain terms, the market is not sure whether the eventual Jio listing will unlock value at the parent, dilute it through a holding company discount, or keep it neutral. Without clarity, momentum traders exit and long-only funds wait for the fine print.
What the Jio listing could mean for shareholders
The core debate is simple. If Jio lists as a standalone company and RIL remains the holding entity, the market typically assigns a holding company discount to the parent. That reflects two things: control and cash flow. The parent controls the asset but may not receive all the cash flows, and investors penalize the structure for complexity and limited transparency.
Analyst math already bakes this in. Consider a consensus fair value for RIL at ₹1,634 per share, with Jio contributing ₹556 to that sum. If you apply a 20% holding company discount to the Jio slice, the value falls to ₹444, pulling the blended RIL value down to ₹1,523. Push the discount to 30%, and the Jio piece drops to ₹389, taking the total to ₹1,467. That logic is what weighed on the shares through the AGM: a listing can “unlock” Jio’s value in the market while simultaneously creating a valuation gap at the parent.
So what would avoid that outcome? The clearest route is a distribution of shares through a demerger, like the one used to list Jio Financial Services in 2023. In that case, existing RIL shareholders received pro-rata shares in the new company, which removed the holding company overhang for that asset. Another path is a large buyback at RIL funded by proceeds from an offer for sale, or a special dividend, though that depends on regulatory and capital considerations. A reserved IPO quota for RIL shareholders could soften the blow, but it is not the same as a direct transfer of value.
There is also a structural choice to make: list the operating telecom arm directly, or list the digital holding company that sits above it. Jio Platforms, which raised money from global investors in 2020, houses multiple digital assets in addition to the telecom business. The choice affects disclosure, comparables, and how minority investors view growth. A pure telecom listing lines up against other carriers on metrics like ARPU, churn, spectrum liabilities, and free cash flow. A platform listing invites a different lens focused on cross-sell, app engagement, ads, and payments. Each path has pros and cons for valuation but also for how cleanly RIL’s sum-of-the-parts translates into the parent share price.
What about timing and approvals? A first-half 2026 target implies filings well before that—draft offer documents, regulatory reviews, and exchanges’ approvals. For a business of Jio’s size, that process will be closely watched. Investors will want audited segment financials, clear capex plans for 5G and fiber, and a roadmap for monetizing enterprise and home broadband. The strongest listings usually arrive with crisp disclosures and a credible pathway to free cash flow.
The AI story sits alongside this listing plan. Reliance Intelligence signals that the group wants to build AI into everyday operations rather than treat it as a side project. In energy, that could mean predictive maintenance at refineries, optimization in chemicals, and smarter energy trading. In retail, AI could handle demand forecasting, shrinkage reduction, and personalized merchandising at scale. For telecom, it can power network planning, customer support, and enterprise solutions. The new partnership with Google fits here: cloud capacity, AI tooling, and model deployment can speed up these use cases while keeping costs in check.
Still, the market will judge AI by outcomes—margin expansion, lower churn, higher conversion—not by slogans. The group has the data, distribution, and capital to build at scale. The execution test is whether these tools lift returns in core businesses and create new revenue lines without runaway spending.
The short-term risk-reward on the stock remains tied to how cleanly the Jio plan lands. If RIL repeats the Jio Financial playbook and passes shares directly to investors, the holding company discount problem goes away and sentiment can flip fast. If the listing is structured through a holding company with no offset for RIL shareholders, the parent could continue to trade at a discount even if Jio commands a premium on its own board.
Beyond structure, investors will track telecom fundamentals. Tariff hikes are the biggest swing factor for profitability across the sector. The speed of 5G monetization matters too—enterprise solutions, fixed wireless access, and premium bundles can shift ARPU up. On capex, the market wants to see a downshift after the coverage buildout and a path toward higher free cash flow. Competitive dynamics with Airtel and the network health of Vodafone Idea are also in the mix.
For retail, store expansion, online scale, and private labels will drive operating leverage. In energy, refining margins and petchem spreads swing with global cycles, but integration and feedstock optimization help smooth some of the bumps. The new energy pipeline—solar, batteries, and green hydrogen—adds a longer-dated growth layer. Investors will look for commissioning timelines, unit economics, and offtake visibility.
Balance sheet and capital allocation are the other anchors. RIL’s ability to fund growth while keeping leverage in check has improved, helped by past monetization at Jio Platforms and the Jio Financial demerger. With another large listing on the horizon, the market will watch for signals on dividends, buybacks, and how proceeds, if any, flow within the group. A transparent framework can cut the perceived risk premium on the shares.
Foreign and domestic flows will shape the tape too. RIL is a heavy weight in major indices, so a big move on listing details can trigger passive and quant flows. Domestic mutual funds tend to buy dips when the long-term story is intact; they will likely wait for clarity before leaning in. Global funds often want a clear line of sight to free cash flow at both the parent and the listing entity before they re-rate.
Here is what markets will watch next:
- The exact listing vehicle: operating telecom arm versus digital holding company, and what assets sit where.
- Filing of the draft offer document and the depth of segment disclosures—ARPU trends, churn, capex cadence, and free cash flow plans.
- The value bridge for RIL shareholders: demerger and distribution, a reserved allocation, a buyback, or a special dividend.
- Guidance on capital allocation at the parent after the listing, including any leverage targets.
- Signals on tariff hikes, 5G monetization, and enterprise rollout milestones.
- How Reliance Intelligence will be measured—clear KPIs tied to margins, productivity, or revenue per user.
- Regulatory milestones and any changes in telecom policy that could affect spectrum, pricing, or competition.
As of now, the market message is straightforward: big-picture promises do not move the stock without mechanics. A 2026 clock on the Jio IPO is a major step, but the structure will decide whether value shows up in RIL’s share price or gets trapped in a holding company discount. The AI plan and the Google partnership add a second growth engine, yet investors want evidence that these tools will lift returns in core businesses, not just sit on a slide deck.
For long-term holders, the investment case is still rooted in scale and execution. Few companies in India have Reliance’s mix of assets: a cash-generating energy base, a dominant telecom platform, a fast-growing retail business, and now a formal AI push. The path to higher valuation runs through cleaner structures, stronger free cash flow, and visible capital returns. That is why, even on a down day, street targets still point to upside over the next year. What happens between now and the Jio listing will determine how much of that upside shows up, and how soon.
