Will Reliance Industries (RIL) chairman Mukesh Ambani take over Steve Ballmer of Microsoft to become the world's fifth richest?

Reliance chairman is just $3.4 billion short of becoming world’s 5th richest and RIL shares touched its 52-week high of Rs 1978.5 on Wednesday ahead of 43rd AGM as analysts upbeat about big-bang announcements.

Will Reliance Industries (RIL) chairman Mukesh Ambani take over Steve Ballmer of Microsoft to become the world's fifth richest? That has now become just a $3.4 billion question.

Shares of Mukesh Ambani-led RIL touched its 52-week high of Rs 1,978.5 ahead of the much awaited company’s 43^rd annual general meeting (AGM) on Wednesday.

Analysts are upbeat about some big-bang announcements during the company's AGM like last year, which will be positive for RIL shareholders and may help Ambani to leave behind his Stanford classmate Steve Ballmer in the global rich list.

As of July 15, Mukesh Ambani is ranked 8^th in the Bloomberg Billionaires Index, a daily ranking of the world's richest people.

Mukesh Ambani, with personal wealth of $71.6 billion, is just $300 million short of overtaking Warren Buffett, chairman and largest shareholder of Berkshire Hathaway and Larry Page, co-founder of Alphabet, the holding company for Google, the world's largest search engine operator, both ranked 6^th and 7^th most richest, according to the Bloomberg Billionaires Index, which is updated at the close of every trading day in New York.

Former Microsoft CEO Steve Ballmer is ranked 5^th in the list with personal wealth of $75 billion. He stepped down in 2014 and remains a shareholder in the Redmond, Washington-based company, which makes the Windows operating system, the Xbox game console and Surface tablet computers.

RIL shares were trading up 2.2% at Rs 1959 on Wednesday noon, valuing the company over Rs 12.42 lakh crore.

RIL is scheduled to hold its 43^rd AGM on Wednesday 2 pm, its first virtual AGM due to the COVID-19 pandemic. Analysts are upbeat about some big bang announcements like last year, a reason investors are flocking to buy RIL shares.

At last year’s AGM, Ambani announced that Saudi Aramco, the world’s largest oil producer, will buy a 20 percent stake in RIL’s oil-to-chemical (O2C) business for an enterprise value of $75 billion to make RIL a zero debtcompany.by March 31, 2021.

The Saudi Aramco deal is yet to conclude, but RIL become a net zero debt company nine months ahead of the deadline set by its chairman after the company sold around 26 percent of its digital firm Jio Platforms to some of the world’s leading tech investors. It collected raised over 1.18 lakh crore for its efforts.

RIL also raised Rs 53,124 crore by way of rights issue, which was subscribed 1.59 times, making it the largest in the world by a non-financial entity in the last 10 years.

Along with the stake sale to BP in the petro-retail JV for $1 billion, RIL would have raised over Rs 1.75 lakh crore in the last three months against the net debt of Rs 1.61 lakh crore as on March 31, 2020, making it a zero net debt company.

This led Mukesh Ambani's wealth more than double from $32.6 billion as on March 23,2020 to over $71.6 billion on July 15, 2020, ahead of the company’s AGM.

In comparison, Steve Ballmer saw around 50 percent growth in his net worth from $50.9 billion as on March 20, 2020 to $75 billion as on July 15, 2020.

Interestingly, Google CEO Sundar Pichai has announced $10 billion of investment in India’s digital ecosystem and reportedly the internet giant is in talks with Jio Platforms to invest $4 billion, according to reports.

According to Bloomberg Billionaires Index, Mukesh Ambani derives majority of his wealth from a 42 percent stake in publicly traded Reliance Industries, While majority of Ballmer's fortune is derived from an estimated 4% stake in Microsoft, the world's biggest software maker.

RIL shares are held by a promoter group, which includes holding companies, trusts and family members, according to a June 2020 filing to the Bombay Stock Exchange. They're all credited in this analysis to Ambani to reflect his status as founder, chairman and managing director.

Microsoft’s former chief executive officer is assumed to still own about 333 million shares of the company, which matches his reported stake in Microsoft's 2014 proxy, the last time his stake was disclosed.

“He's collected about $10 billion from dividends and the sale of Microsoft shares, according to an analysis of Bloomberg data as of May 2020, and the value of his cash investments is based on these proceeds as well as taxes and market performance,” said Bloomberg Billionaires Index.

Post AGM announcements, analysts believe that RIL shares will accelerate the growth momentum, making Mukesh Ambani richer than Steve Ballmer.

Investors are awaiting some clarity on the $15 billion deal with Saudi Aramco that got delayed due to unprecedented fall in crude oil prices globally due to the Covid 19 pandemic, impacting valuations of the deal. Google reportedly is in talks with RIL to invest about $4 billion in Jio Platforms and investors will be keen on getting clarity on such investment Ambani during the company's AGM and the roadmap for Jio Platforms.

Investors will also watch out for any announcement relating to listing of the telecom, digital and retail businesses.

“Investors will watch out for clarity on Google’s $4 billion investment in JIo Platforms. If there are similar plans to get investors for Reliance Retail. An update on the $15 billion Saudi Aramco deal is anticipated. If the announcements are not big enough, the stock may correct given it has touched a new high today anticipating big band announcement,” said investment advisor S P Tusian.

Paras Bothra, president, equity research, Ashika Stock Broking believes that RIL shares may breach the Rs 2000 mark post AGM announcements by RIL chairman Mukesh Ambani. “Investors would like to know the capital allocation policy of the company after the company raised over Rs 1.75 lakh crore and also bonus issuance. Last year, investors were concerned with $66 billion debt and today the company is net zero debt company. Investors will look out for proposed plans for Jio Platforms Limited.

The announcements in RIL’s 43^rd AGM will determine if Mukesh Ambani will become the world's fifth richest and fourth biggest tech-billionaire as the top three tech billionaires include Jeff Bezos of Amazon, Bill Gates of Microsoft and Mark Zuckerberg of Facebook.

Bernard Arnault, France's richest person is the chairman of LVMH Moet Hennessy Louis Vuitton, the world's largest maker of luxury goods is the only person in the list of top five billionaires, outside the technology space.

Piyush Pandey is a senior journalist based in Mumbai.

Disclosure: "Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Moneycontrol."