7/16/2020 Jio: After a $20 billion Jio frenzy, India's richest man is now seeking money for retail

eeking money for retail - The Economic Times

Industry
English Edition | 16 July, 2020, 10:32 AM IST | E-Paper

After a $20 billion Jio frenzy, India's richest

man is now seeking money for retail
Synopsis
Asia’s richest man and the chairman of RIL told shareholders Wednesday that Reliance
Retail Ltd. is getting inquiries from investors and may start bringing some on board in
the coming months.

AP
By P R Sanjai

After raising more than $20 billion for

his digital venture in three months,
billionaire Mukesh Ambani is readying
his retail unit for global partners, as his
oil-to-petrochemicals conglomerate
turns to India’s billion-plus consumers
for growth.

Asia’s richest man and the chairman of Reliance NSE 0.37 % Industries Ltd.
told shareholders Wednesday that Reliance Retail Ltd. is getting inquiries
from investors and may start bringing some on board in the coming months.
The legacy petrochemicals business is also getting attention from potential
investors even though a proposed stake sale to Aramco isn’t proceeding as
planned, he said.

“We’ve received strong interest from strategic and nancial investors in

Reliance Retail,” Ambani told the 300,000-plus people who logged into the
virtual conference from 41 countries. “We will induct global partners and
investors in Reliance Retail in the next few quarters.”

The 63-year-old tycoon has identi ed technology and retail as future growth
areas in a pivot away from the energy businesses he inherited from his father
who died in 2002. Retail is the next frontier for Ambani, who just nished
selling almost 33% of his digital venture over the past three months to a slew
of investors including Silicon Valley giants Facebook Inc. and Google, valuing
Jio Platforms Ltd. at $58 billion.

Reliance Retail, which runs supermarkets, India’s largest consumer

electronics chain store, a cash and carry wholesaler, fast-fashion outlets and
an online grocery store called JioMart, reported 1.63 trillion rupees ($22 billion)
in revenue in the year through March 2020. The unit operates almost 12,000
stores in nearly 7,000 towns.

Although Ambani laid out a vision for a technology future for Reliance
Industries at the shareholders meeting, shares of the conglomerate slumped.
The tycoon con rmed that a planned sale of stake in Reliance’s oil-and-
chemicals division to Saudi Arabian Oil Co. for an estimated $15 billion hadn’t

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7/16/2020 Jio: After a $20 billion Jio frenzy, India's richest man is now seeking money for retail - The Economic Times

progressed as planned, disappointing investors.

The stock fell 3.8% Wednesday, its biggest loss since May 14, paring gains from
a rally spurred by the frenzied fundraising by Jio. The drop shrank Ambani’s
net worth to $69 billion, according to the Bloomberg Billionaires Index,
pushing him down the rankings to the world’s 10th richest. Earlier this week,
he had brie y rocketed to No. 6, past Elon Musk, Warren Bu ett and Google
co-founders Sergey Brin and Larry Page.

Most of Ambani’s focus during the 93-minute presentation to shareholders

was on technology. He, along with his children Isha and Akash Ambani,
unveiled a slew of services, including a fth-generation wireless network as
early as next year and a mega video-streaming platform that will bring Net ix,
Disney+ Hotstar, Amazon Prime and dozens of other TV channels under one
umbrella. The twins, who have been at the forefront of the fundraising e orts,
also demonstrated some of the technologies.

“I believe that the time has come for a truly global digital product and services
company to emerge from India, and to be counted among the best in the
world,” Ambani said.

Jio Platforms, unveiled last year, is now at the center of his ambitions to tap a
billion Indians increasingly embracing mobile devices and data plans to shop
online. Jio is eyeing an opportunity to shake up retail, content streaming,
digital payments, education and health care.

Those plans would put Jio in direct competition with e-commerce giant such
as Amazon.com Inc. and almart Inc.’s local operations. Alphabet Inc.’s
Google is the latest to join Jio as an investor, with Wednesday’s
announcement of a $4.5 billion investment for a 7.7% stake.

“Each of the new hyper growth engines have high customer acceptance
opportunity with scale, and will be multiple times current valuation, making
the traditional oil and gas business a less than 20% contributor to valuation
going forward,” said Chakri Lokapriya, chief investment o icer at TCG Asset
Management in Mumbai.

Jio, which started out as a wireless carrier as its rst building block back in
2016, will roll out its 5G network once airwaves are available, according to
Ambani. Unlike most other carriers, Jio will use a technology developed in-
house for 5G, Ambani said, leaving it immune to pressures many global
telecommunications companies are facing from the U.S. over Chinese
equipment vendors.

Here are some of the plans laid out by Ambani:

* Google and Jio are partnering to build an Operating System that could power
a cheap 4G/5G smartphone.
* JioMart, the online shopping portal, and WhatsApp will be working closely to
create growth opportunities for millions of Indian small merchants and
enable customers seamlessly transact with mom-and-pop stores
* Jio Glass to bring teachers and students together in 3D virtual rooms and
conduct holographic classes through our Jio Mixed Reality cloud in real-time
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7/16/2020 Jio: After a $20 billion Jio frenzy, India's richest man is now seeking money for retail - The Economic Times

* Broadband for enterprises and small businesses; Narrowband Internet-of-

Things (NBIoT)

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