Reliance Jio – On A Fundraising Spree Amidst The Pandemic Crisis

Reliance Industries, one of India’s biggest conglomerate, has raised $10 billion in just 4 weeks through five-stake sales in its subsidiary company Reliance Jio. The valuation of Reliance Jio has surged to $65 billion, making it the country’s second-most valuable standalone tech company after Tata Consultancy Services.

Before this fundraising spree, Reliance Industries Ltd, controlled by Mr. Mukesh Ambani, was worth $129 billion. The Jio Platform’s valuation has put the company ahead of the combined conglomerates of oil, gas, and other businesses. Jio Platform secured $1.5 billion from KKR, the US private equity giant, and four other deals. Facebook Inc. led the fundraising with an investment of $5.7 billion for a 9.99% percent stake in the company. About $1.5 billion has been invested by Vista Equity Partners, approximately $850 million by General Atlantic and $750 million by Silver Lake. Reliance retains 83% of Jio Platforms after this sale. 

Reliance Jio, headquartered in Mumbai, is one of the biggest mobile networks in India. Since its launch in 2016, the company has notched up 388 million subscribers. Besides that, the company also has an ecosystem of apps that offers millions of its mobile network users a plethora of services, from online shopping to video streaming to digital payments.  

According to industry experts, Mr. Ambani’s ultimate goal is to build the next global technology company, one that could be in the same league as Google, Alibaba, Tencent, and Amazon. The amount raised will be used to fulfill this ambition as well as to clear approximately $21.4 billion debt of the parent company by the end of this year. The energy and oil industry, which forms a significant part of the Reliance business, has suffered significantly due to the pandemic. Due to restrictions on transport, industrial, and commercial activities, the global demand for oil has declined.

However, in the last three years, the shares of Reliance Industries have tripled in value concurring with staggering subscriber growth at Jio Infocomm, which is also a part of the Jio Platform. In addition to running the biggest refining complex, Reliance also a host of other businesses.