Mukesh Ambani to Get Investors in Jio and its Fiber and Tower Subsidiaries

Reliance Jio became second largest telecom operator in India by the end of April, 2019 beating Airtel, that's nearly 2.5 years after Jio have launched services. While Vodafone Idea achieved 300 million customers after the merger, Airtel crossed that mark in its 19th years of operations. 

Currently Jio has 30.6 crores of subscribers, while first boy Vodafone Idea stands at 40.9 cr and Airtel stands at 28.4 cr. It should be noted that Airtel was market leader for nearly 15 years until Vodafone and Idea merged their business in August 2018 to become new top. 

Back in August 2018, Jio surpassed Vodafone India to stand second as per Revenue Market Share (RMS), while Airtel remained first. Analysts expect Airtel's top spot may be snatched by Jio as early as within next 2 quarters. Jio may also topple Vodafone Idea's top position as largest customer base in less than a year. Reliance Jio is making a profit in its operations and boasts of highest adjusted gross revenue (AGR) in access services amongst all telecom companies 

There are few more advances inside Jio. 


Jio Spinoffs Fiber Co and Tower Co and Looking for Investors

In March 2019, Jio has diversified its operations, spined off two key assets - fiber and towers into two seperate infrastructure investment trusts (InvITs) - Jio Digital Fibre Pvt Ltd (JDFPL) and Reliance Jio Infratel Pvt Ltd. (RJIPL) who are now accountable for Jio's 7 lakh km of fiber optic network and 1.75 lakh built and under development towers respectively. The Sebi registered trusts are sponsored by RIL’s 100% subsidiary, Reliance Industrial Investments and Holdings Ltd (RIIHL). The demerger has helped Jio cut liabilities of Rs 1.07 lakh crore. 

In March 2019 Jio has also tasked three investment banks Citi, Moelis and ICICI Securities for getting investors for its Fiber and Tower companies, both valued at $23.84 Bn and $5.27 Bn. Many global companies are interested including Canadian pension funds CPPIB, Ontario Municipal Employees’ Retirement System (OMERS), British Columbia Pension Corporation (BCPC), Middle East sovereign wealth funds such as Abu Dhabi Investment Authority (ADIA), investment companies such as Mubadala and Singapore’s GIC, and European financial powerhouse Allianz SE. 

SoftBank plans to invest in Jio

There are market update that Japan's SoftBank is planning to invest $ 2-3 Bn in country's fastest growing telecom company Jio through the $100 Bn Vision Fund as . SoftBank Vision fund has invested $ 10 Bn in 8 of Indian companies Ola, OYO, Grofers, Housing.com, Hike, PropTiger, Paytm and Paytm Mall; as well as global companies like Uber, WeWork, Slack, and GM Cruise. 

SoftBank was an investor in Flipkart, until Walmart acquired Flipkart. As Jio plans for an entry into e-commerce, that thing could attract SoftBank's policy makers as a return to India's ecommerce market. JP Morgan reports that SoftBank was eyeing Jio for quite some time. 

Mukesh Ambani's plan to sell stakes of Jio and Jio's fiber and tower companies comes at a time when Saudi giant Aramco is in talks to buy a 25% stake in Reliance Industries' refining and petrochemical business for $10-15 billion. 

Jio Tariff Hike - may be in 2020

Now regarding customers of Jio, many analysts warn that Jio may hike tariff in coming days, may be in next year. According to a JP Morgan report, "The likelihood of Jio raising prices is higher today than it was six to nine months ago, which has positive implications for incumbent peers, particularly, Vodafone Idea.'' With too many investors in Reliance Industries' top business (oil and telecom) I can't disagree with the analysts.