How Reliance Industries Plans to become Debt Free

8th deal for Jio Platforms in less than seven weeks – Successfully Cruising Towards Zero Debt Status –Tieups to accelerate the process of Digitization

Jio, with 388 million users, combines all of RIL’s digital and telecom initiatives, including Jio digital services, mobile and broadband, apps, tech capabilities such as artificial intelligence, Big Data, and Internet of Things, and other investments such as in Den Networks, Hathway Cable, and Datacom. Reliance’s plans are not just instruments for clearing debt and the company has now opened up to a host of global investors.For instance, the tie-up with Facebook may help accelerate the process of digitising Reliance’s retail businesses.By bringing together JioMart, which is Jio’s business initiative with Whatsapp, Facebook plans to connect people with businesses, shops and purchase products, giving them a chance to discover new products.

The collateral benefits of the Reliance Jio-Facebook deal are many.

Firstly, Facebook, which includes WhatsApp and Instagram, caters to about 400 million users. Reliance Jio also has about the same number of clients, with some overlap. But since JioMart has been formed by RIL, the company is planning to enter in a big way to start the e-commerce business and e-payment services.The Jio-Facebook combine can compete with others in the e-commerce and e-services areas for which the vast WhatsApp and Instagram subscribers will add to JioMart’s reach to compete, reduce margins, and, therefore, prices for the consumers.

Secondly, already JioMart has begun trial runs in Navi Mumbai, Thane, and Kalyan besides RIL ownership in 6,700 big and small cities of 10,900 retail stores, employing 1,25,000 people. WhatsApp is also connected to small businesses, taking orders from customers, and promoting offerings through internet and cellphones. Thus, Facebook and Jio combined will have huge market reach and consumer convenience.

Thirdly, households will be able to reach by cellphones the nearest kirana stores and place orders for home delivery, Here too, Jio-Facebook can reach this way millions of traders and kirana merchants on the cellphones and internet and thus save consumers from having to make the trip physically for purchase.

Fourthly, the Jio-Facebook combine can now easily explore, with government concurrence, the introduction of a cryptocurrency network. The government of India has already approved block chain technology. The final step of digital currency may have to wait because the regulatory infrastructure has not yet been set up. When that happens, black money will become impossible to use as legal currency in circulation. Illegal transactions via cryptocurrency and block-chain will be impossible without detection.

The potential investors will not only help in bringing down the company’s debt but also offer technological advances that can be integrated for better monetization. Therefore, it is safe to say that the company's 'zero-debt' strategy, involving leading technology companies is part of a larger plan in progress -- a technology-first vision that allows the company to expand in future.

With the recent ADIA investment, Jio Platforms has raised Rs 97,886 crore from leading global investors including Facebook, Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala and ADIA in less than seven weeks.

How Reliance Industries Plans To Become Debt Free
Name Of The Investor	% stake	Amt (Rs crore)
Facebook	9.99	43,574.00
KKR	2.32	11,367.00
Silver Lake Partners	1.15	5,655.75
Silver Lake Partners	0.93	4,546.80
Vista Equity Partners	2.32	11,367.00
General Atlantic Partners	1.34	6,598.38
Mubadala Investment Co	1.85	9,093.60
Abu Dhabi Investment Authority	1.16	5,683.00
Total Stake Sale In Rel Jio	21.06	97,885.53
Stake Sale In Fuel Retailing Unit		7,000.00
Rights Issue (Rs 53125 cr)		13,281.25
Cash Profit Generation FY21 - Exp		53,000.00
Total Amount To Be Generated		1,71,166.78
Net Debt Of RIL 31.03.2020		1,61,843.00

The pursuit of 5G: Reliance Jio's ‘AatmaNirbhar’ self-dependent plan Launch of 5G-enabled technologies will unlock various disruptive new technologies; Reliance Jio has been making all-out efforts to step-up its 5G game in India. Reliance Jio has sought the government's permission to undertake 5G trials in India using its own technology and design. With this, Jio has emerged as the first Indian telecom major to seek 5G trials based on self-designed technology.

Apart from Reliance Jio, three global telecom service providers, Huawei Technologies, Ericsson, and Nokia Networks, are also vying to cash in on India's 5G plan. If trials are successful, this will also end Reliance Jio's dependence on Samsung, which was earlier its sole equipment supplier for 4G technology.

The development comes amid Reliance Jio's long-drawn plan to solidify its design and technology base in the country. From Rancore Technologies to US-based Radisys -- Reliance Jio has been making all-out efforts to step-up its 5G game in India.

The launch of 5G-enabled technologies is expected to be transformative in the telco and other industries by unlocking various disruptive new technologies. Global investment in the 5G industrial chain over 2020-2035 is likely to reach $3.5 trillion.

On the 5G front, the biggest roadblock for Jio, or for that matter any operator, is going to be steep spectrum prices. The base price of the 5G spectrum (in 3,300 megahertz to 3,600 megahertz band) is highest in India. At TRAI's recommended reserve price of Rs 492 crore per MHz, operators will have to pay around Rs 50,000 crore for 100 MHz pan-India spectrum - that's the minimum spectrum required to deliver 5G services (in sub-6000 MHz bands) as per global body ITU. The government has also said that it's not planning to reduce the base price for the 5G spectrum.

Latin Manharlal Sec. Pvt. Ltd.
Image & Data Source: Google