JIO geared to disrupt the Broadband and IoT Industry

Mukesh Ambani is hitting the brakes on a seven-year, $100 billion investment spree across refining, petrochemicals, telecom and retail? While a breather after such frenzied activity may be understandable, why does he want Reliance to be a zero-net debt company in 18 months? What will it mean for the more than 100 banks and financial institutions around the world that provide India’s largest company and its subsidiaries with billions of dollars, yen, and rupees—in financing and refinancing?

The goal of Reliance Jio is quite clear to acquire at least half of India’s 1 billion-plus mobile customers, and that required continued spending.Ambani also said Reliance Retail, the nation’s largest retailer, is working on a “digital stack” to create a new commerce partnership platform in India to reach tens of millions of merchants, consumers and producers. Ambani said Reliance Industries plans to list both Reliance Retail and Jio publicly in the next years.

Without revealing full detail of the project, Ambani said that ,Jio is building an IoT platform to control at least one billion of the two billion IoT devices in India by next year. He said he sees IoT as a $2.8 billion revenue opportunity for Jio. Similarly, the company also plans to expand its blockchain network across India.

Mukesh Ambani is selling 20% of the family business—Reliance’s refining and petrochemical operations—to Saudi Arabian Oil Co. even though the goal is more strategic than just shedding debt. The $75 billion enterprise value at which Aramco is investing is a lot higher than the business is worth.

Saudi Arabia wants takers for its surplus oil in a world of electric vehicles, and if Reliance’s refinery can provide a profitable outlet for 500,000 barrels per day of Saudi crude by converting it into jet fuel and polymers, then Ambani is doing the right thing by taking Aramco’s money.

The AGM seems many things as the experts could smell from the speech, India’s slowdown is deepening and several Indian business leaders have sounded the alarm on the Indian economy’s increasingly challenging and the company’s digitization blitz is causing unpredictable disruption.

A day after Reliance told shareholders that they could watch movies on their new home broadband the same day as the cinema release, shares of PVR Ltd, India’s biggest theatre exhibitor, fell more than 8% intraday. Lastly, Ambani may or may not share their concerns, his cautious actions can only serve to bring the storm closer.