The sovereign fund of Saudi Arabia will pour out $1.5 billion in investment in the Indian tycoon Mukesh Ambani-controlled telecoms and digital services business, valuing the new venture in Jio Platforms Ltd around $15.2 billion in total since April this year.
The Public Investment Fund will acquire a 2.32 percent ownership in Reliance Industries' division, the Mumbai-headquartered company disclosed Thursday in a media release.
The contract, the 11th in Jio in a span of two months, adds to the list of prominent investors optimistic about the group that will disrupt India's vast consumer market with its portfolio of advanced technology.
Saudi Arabia's Public Investment Fund is one of the world's most successful sovereign wealth funds. With the deal, Jio Platforms - the country's largest telecom group with over 388 million clients - has raised $15.2 billion from 10 investors, including social media empire Facebook Inc, in the last nine weeks by unloading a 25 percent share in its business.
For some comparison, last year India's startup landscape secured $14.5 billion, in what's been its most successful year. Wednesday's announcement further underscores the opportunities foreign capitalists see in Jio Platforms, a three-and-a-half-year-old subsidiary of India's most valuable company which has upended India's telecommunications market with cut-rate voice communications and mobile data taxes.
Facebook has hundreds of millions of users in India and has already invested heavily in boosting its own market, but in recent years has faced a wave of regulatory issues.
Reliance Industries on Friday disclosed that it is now free of debt, thanks to the fundraising spree and a recent $7 billion stock sale. The company said its total debt was 1.61 trillion rupees ($21 billion) at the end of March.
In recent days, Jio Platforms - which will integrate content streaming, telecommunications, online gaming, and e-commerce features into its app - has witnessed Abu Dhabi's Mubadala and ADIA secure huge stakes worth $1.2 billion and $750 million, respectively.
Analysts at Bernstein stated they estimate Jio Platforms to register 500 million clients by 2023 and control 50 percent of the market by 2025. Jio Platforms competes with Vodafone Idea and Bharti Airtel, as well as a joint partnership between British giant Vodafone and Indian billionaire Kumar Mangalam Birla's Aditya Birla Group.
According to market experts, Ambani's ultimate goal is to create the next global technology conglomerate, one that can compete with giants like Google, Amazon, Tencent, and Alibaba. The support of the Saudi wealth fund, which has huge stakes in several companies including Tesla and Uber, will help Ambani reach his goals.
