Reliance Industries Limited is all set to form a wholly-owned subsidiary that will own all of RIL’s digital platform businesses. With the rejig, the company aims to raise external funds for its digital connectivity platform, Reliance Jio.
RIL said that it has received board approval for the formation of a ‘new-age digital technology platform,’ which will hold the company’s digital connectivity platform, including Reliance Jio Infocomm Ltd (RJIL), according to filings made with exchanges on October 25. The subsidiary will also include digital platforms like MyJio, JioTV, JioCinema, JioNews and JioSaavn.
The board has also approved a $15 billion investment by RIL through optionally convertible preference share (OCPS) in the new subsidiary. Through a series of measures, RJIL will become net debt-free by March 31, 2020, said the filing.
RIL’s total equity investment in digital services will increase to $24.4 billion through the subsidiary.
This news comes months after media reports speculated that Jio was in talks with Japan’s SoftBank Vision Fund for an investment of up to $3 billion.
In a presentation made to analysts, RIL said that the reorganisation proposal will make RJIL efficient in attracting strategic and financial investment.
“Given the reach and scale of our digital ecosystem, we have received strong interest from potential strategic partners. We will induct the right partners in our platform company, creating and unlocking meaningful value for RIL shareholders,” said Mukesh Ambani, chairman and managing director of RIL in a statement related to the formation of the digital platform company.
Jio was launched in 2016 and now has over 355 million subscribers. It has also made a string of acquisitions; including AR-VR startup Tesseract
AI-based chatbot Haptik, hyperlocal logistics company Grab, vernacular language services platform Reverie, software firm C-Square and Sankhya Sutra Labs and fashion marketplace Fynd to build its e-commerce and digital services vertical.