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Oil to telecom conglomerate Reliance Industries (RIL) has initiated the process to seek shareholders' approval for the appointment of the third generation of the Ambani family on the company's board.
The remote voting through postal ballot will start from September 27 onwards.
In a separate note, CreditSights said a trust and hold-co model could be a possibility for the anticipated succession at RIL.
On Monday, RIL informed the exchanges of a postal ballot notice seeking approval of the members of the company, by way of remote e-voting, for the appointment of Isha Ambani, Akash Ambani, and Anant Ambani as non-executive directors of the company.
The e-voting process ends on October 26.
In August, the company's board had approved the proposal of the three appointments, seen by many as the start of succession.
CreditSights, a FitchSolutions company, in a note dated September 22 on Ambani's succession plans said, "Under the current corporate structure, RIL acts as both a holding and an operating company.
"We believe RIL could eventually transform completely into a holding company (holdco), with majority stakes in independent entities that operate the major business verticals."
CreditSights expects a logical arrangement could entail having three future listed or unlisted entities that will respectively house "the telecom business (headed by Akash), retail business (headed by Isha), and new energy (headed by Anant)."
The research agency also explores the possibility of a listing for the Oil-to-Chemicals (O2C) business.
"We think RIL could sell down its stake to strategic partners and/or publicly list the O2C segment to unlock value, and leave its management to professional managers."
Apart from a failed attempt to sell a partial stake to Saudi Aramco in 2019, RIL has so far not mentioned any plans to divest any stake in the O2C division.
CreditSights further said it expects RIL will remain a family-owned/controlled company even after Mukesh Ambani hands over the reins to his three children.
"One possible arrangement could be to create a trust, owned and controlled jointly by Mr Ambani, the three siblings, and their family members; with RIL managed by a professional management team," the note said.
An advantage of the hold-co model, the note said, was a clearer distinction between each division's assets and cash flows, unlocking stakeholder value.
On the other hand, the note argued, "RIL's debt will become more reliant on dividend upstreaming to service its debts."
