Doha-based Qatar Investment Authority (QIA) is eyeing a $1.5 billion (Rs 11,200 crore) stake in JioFiber assets.
QIA is in advanced conversation with RIL and will invest the sum in the infrastructure investment trust (InvIT) that holds the latter’s fiber optics business.
The InvIT currently takes care of a 7 lakh kilometres countrywide fibre network and plans to broaden it further to 1.1 million kilometres.
After raising as much as $20 billion from foreign investors so far this year for the oil-to-telecom conglomerate’s digital services company, Jio Platforms, the Mukesh Ambani-led company is now looking to monetize its fiber optic assets in Jio Fibre Pvt Ltd.
The potential deal fits right in Reliance’s plans to make Jio an asset-light digital services company in order to keep costs minimum as the company prepares for a 5G launch across India, one of them, the report said quoting sources.
RIL has reportedly hired Citigroup Global Markets, Moelis and Co. and ICICI Securities as investment bankers for the potential stake sale in Jio Fiber. The proposed deal with QIA is one in a series of such deals announced by Reliance Industries as it tries to restart the company primarily as consumer tech and diversify from its credentials of being an oil and gas giant.
“Fibre network business monetization falls exactly in line with RIL’s original plan to make Jio become an asset-light digital services company and save significantly on costs as the group is gearing up to offer affordable 5G services. It has an immense revenue generation potential, adding that QIA may invest $1.5-2 billion in RIL’s fiber business.”
Reliance has hired Citigroup Global Markets, ICICI Securities Ltd, and Moelis and Co. for the proposed deal with QIA.
Previous Investments
Jio has so far raised over Rs 1.52 lakh crore from investors including Facebook, Google, Silver Lake Partners, Vista Equity Partners, General Atlantic, KKR, Mubadala, ADIA, TPG, L Catterton, PIF, Intel.
Global search engine giant Google was the latest to announce that it will invest Rs 33,737 crore into Jio Platforms for a 7.73% stake in the latter.
The investment valued RIL’s digital arm at an equity value of Rs 4.36 lakh crore. During RIL’s 43rd Annual General Meeting earlier his Ambani also announced that Jio Platforms and Google entered into a commercial agreement to jointly develop an entry-level affordable smartphone with optimizations to the Android operating system and the Play Store.
The stock price of RIL has grown 2.4 times to date since hitting a low of Rs 867.43on March 23 as the company became debt-free by raising money through a string of deals in Jio Platforms.
Last year, a consortium led by Canada’s Brookfield Asset Management invested Rs 25,215 crore in an InvIT holding RIL’s telecom tower assets.
RIL’s telecom subsidiary Reliance Jio Infocomm had in March 2019 demerged its fiber and tower businesses into Jio Digital Fibre Pvt. Ltd and Reliance Jio Infratel Pvt. Ltd.
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