Google will become the 13th investor to bet big on Reliance Industries’ telecom and digital unit Jio Platforms by picking up 7.73% stake for Rs 33,737 crore. This is as per a report in the Economic Times.
The investment will be from Google’s recently announced $10 billion India digitisation fund and interestingly makes the internet giant become the second largest minority investor in Jio Platform after arch rival Facebook.
“Jio Platforms Limited, a subsidiary of the Company, today signed binding agreements with Google International LLC pursuant to which Google would invest Rs 33,737 crore for a 7.73% equity stake in Jio Platforms,” RIL said in a statement.
This would be a rare instance of two FANG – Facebook, Apple, Netflix, Google – companies investing in one firm anywhere in the world and is another stamp of approval from global digital behemoths who now accept RIL turning a technology and digital firm from an energy to retail focussed conglomerate, say analysts. Facebook has invested Rs 43,574 crore for a 9.9% stake.
“We welcome Google onboard and are excited about our partnership for what it can deliver to Indians, from universalising Internet usage to deepening the new digital economy and providing a prime mover to India’s economic growth,” said Mukesh Ambani, Chairman and Managing Director of Reliance Industries.
Jio Platforms houses RIL’s telecom business under Reliance Jio Infocomm, which is the largest in the country with nearly 400 million subscribers, besides other digital properties and investments.
With this, the total investment from financial and strategic investors into Jio Platforms stands at Rs 1,52,056 crore for a combined 32.97% stake in about two months. Google’s investment in Jio Platforms comes at an equity valuation of Rs. 4.36 lakh crore, lower than the Rs 4.62 lakh crore that Facebook had invested at in April. The Google deal is subject to regulatory approvals.
The partnership is a multi-pronged one and the two companies have entered a commercial agreement to jointly develop an entry level affordable smartphone with optimizations to the Android operating system and the Play Store. The smartphone that will even support 5G is targeted at the 350 million feature phone users in India.
“We think the time is right to increase our commitment to India significantly, in collaboration with local companies, and partnership with Jio is the first step. We want to work with Jio and other leaders in the local ecosystem to ensure that smartphones-together with the apps and services in the Play Store-are within reach for many more Indians across the country,” said Google in a blog post.
Jio so far had offered Jio Phone -a 4G feature phone again targeting the same audience who are yet to migrate from their 2G feature phone and so far has sold above 100 million.
“Everyone should have access to the internet. Proud to partner with @reliancejio to increase access for the hundreds of millions in India who don’t own a smartphone with our 1st investment of $4.5B from the #GoogleForIndia Digitization Fund”, tweeted Sundar Pichai, CEO of Google and Alphabet on Wednesday.
