Reliance Jio to broke all the records during COVID-19

Digital technology is rapidly transforming society and the world with, unprecedented opportunities to meet the newer challenges. Growing opportunities created by the application of digital technologies including AI, ML, Bigdata, Blockchain, Crypto and e-commerce has lead to accelerate to keep pace. At the same time the present pandemic has slowed down the vision of running flying cars which was a far-fetched dream, and the lockdown grounded the airplanes as well.

But the luck seems to be favouring the Billionaire Mukesh Ambani to achieve his vision of making him debit free. Mukesh Ambani has laid out a road map to make Reliance Industries Ltd (RIL) free of net debt by early 2021. Experts believes that, one of the best reason for Reliance Jio to be going on a stake selling spree so aggressively could be because of the debt burden that has been mounting upon Reliance Industries due to the coronavirus pandemic.

Reliance Jio Platforms is the whole owned subsidiary of RIL. Currently, RIL has a gross debt of over Rs 3 lakh crore and a net debt of Rs 1.5 lakh crore.

All the positive movement in Jio towards getting investment from the Global giants, seems his ambition to come true. Many global investors are looking to buy a stake into the $65-billion digital arm of Reliance Industries. At the same time if the pandemic continues for a longer time, then there is a chance to come back to square one.

A question is why Reliance Jio is on the stock selling mood and Mukesh Ambani wants to build a world class institution. Many think tanks are exploring idea’s on the recent M&A drive by Jio. The reason is quite obvious that while the global economy remains depressed in the wake of the coronavirus pandemic, Reliance Jio is garnering one after another investment.

The industry is not able to guess on the game plan of Reliance Jio?

Investors are betting on Jio’s access to India’s huge consumer market, and its potential to shake up traditional industries in the country -- from retail to education and payments -- with its technology. India is the only major open Internet market where foreign technology giants such as Amazon.com.Inc., Walmart Inc. and Google’s parent Alphabet Inc. can compete for market share.

In less than three weeks, Jio Platforms has now raised Rs 60,596.37 crore by selling a total stake of 13.5 per cent. Post transaction, RIL’s holding in Jio Platforms will stand at 86.5 per cent. General Atlantic, the U.S. investment firm that helped fund Airbnb Inc. and Uber Technologies Inc. is now discussing a potential investment of about $850 million to $950 million in Jio Platforms.

Key Highlights:

1. Mark Zuckerberg’s Facebook agreed to buy a 9.99 per cent equity stake in Reliance Jio for Rs 43,574 crore (Investment of $ 5.7 billion USD.

2. Silver Lake Partners and Vista Equity Partners this week said they would invest about $2.25 billion in total.

3. Saudi Arabia’s $320 billion sovereign wealth fund is exploring a potential investment in Reliance Industries Ltd.’s digital unit.

Reliance is also in talks with Saudi Arabian Oil Co. to sell an estimated $15 billion stake from its oil-and-chemicals business. The Reliance industries said in a statement that, it is the largest FDI in the technology sector. The goal of the investment is to enable new opportunities for businesses and create new and exciting digital ecosystems to empower 1.3 billion Indians. It also said that the partnership assumes special significance amid disruption caused by coronavirus outbreak, adding that 'comprehensive digitalisation' will be a 'necessity for the revitalisation of the Indian economy.'

As per the reports, Mukesh Ambani said, "All of us at Reliance are humbled by the opportunity to welcome Facebook as our long-term partner in continuing to grow and transform the digital ecosystem of India for benefit of Indians." He added, "In post corona era, I am confident of India's economic recovery and resurgence and in the shortest period of time. This partnership will surely make an important contribution to the transformation."

I am sure , with the huge pipeline of investments that are coming into would definitely be going to act as catalysts for fulfilling Mukesh Ambani’s vision for Reliance Jio to create a digital-umbrella of products in every single category for India.