Mukesh Ambani gears up for India's e-commerce giant with $24 billion investments

In a bid to dominate the country’s internet shopping space, Mukesh Ambani moving one step ahead for creating an e-commerce giant for India, unveiling plans to set up a $24 billion digital-services holding company that would become the main vehicle in his ambition to dominate the country’s internet shopping space. RIL board approved a proposal to plow Rs 1.08 lakh crore ($15 billion) which will in turn invest in Jio.

An expert says, the business growth in the sector of e-commerce seems positive in the country, reason being the growing populations, but most of the companies are facing loss, whereas the turnover of the companies are increasing marginally. The reason being consumers are going for on-line shopping only if they are offering for something less priced. Hope Mukesh Ambani must know the art and science of doing the loss making business, like Amazon and Walmart Inc's Flipkart are doing.

With the new holding firm, Ambani is also readying the businesses for an initial public offering, He is also stitching together a network of partners through acquisitions and stake purchases to build a backbone for his e-commerce plans.

“Given the reach and scale of our digital ecosystem, we have received strong interest from potential strategic partners,” Ambani said in a statement. “We will induct the right partners in our platform company, creating and unlocking meaningful value for RIL shareholders.”

Reliance Industries will invest the money in the holding company -- likely on the lines of Alibaba Group Holdings Ltd and Alphabet Inc -- through optionally convertible preference shares. The unit will acquire the parent’s equity investment of Rs 65,000 crore in Jio, according to Reliance Industries.

Following the equity infusion, Reliance Jio will transfer liabilities worth Rs 1.08 lakh crore to a subsidiary of the parent, turning Jio almost debt free, excluding airwave-related liabilities.

The new structure will create the largest digital services platform company in India. The new entity will continue to work on technologies in areas like healthcare and education, while also looking at next-gen competencies.

The new structure will also create the largest digital services platform company in India. The new entity will continue to work on technologies in areas like healthcare and education, while also looking at next-gen competencies like artificial intelligence, Blockchain, virtual and augmented reality, among others.

It will also bring into its fold Reliance's consumer-focussed digital offerings like MyJio, JioTV, JioCinema, JioNews and JioSaavn, while enabling Reliance Jio to become "virtually net debt free" by March 31, 2020 (excluding spectrum liabilities)