Indian conglomerate Reliance Industries Limited is spinning off its mobile operator Jio and several other digital and media divisions into a new subsidiary that is being billed as India’s biggest digital business.
Mukesh Ambani, chairman and managing director of RIL, in a press release announcing the transaction, said: “This new company will be a truly transformational and disruptive digital services platform. It will bring together India’s No 1 connectivity platform, leading digital app ecosystem and the world’s best tech capabilities, to create a truly digital society for each Indian.”
RIL will own 100 per cent of the new business, which will have a total capitalisation of ₹1,73,000 crore ($15bn). RIL will also take on all the new division’s debt. The deal is expected to be completed by March 2020.
Jio, which has more than 355 million subscribers and in August expanded into offering home broadband services, has streaming rights for Board of Control for Cricket in India matches. Earlier this month, Nita Ambani, a Reliance board member and the wife of the chairman, said the company was keen on acquiring more digital sports rights, including potentially English Premier League football.
Media reports are interpreting the spin-off of Jio and the other entities as an effort to attract investors interested in betting on the growth of digital services in India. It will create an opportunity to buy into a company that has operations in several attractive digital services sectors and is debt-free. Its components will include the mobile operator Reliance Jio, the sports and television programme-focused JioTV streaming platform, the movie-focused streaming platform JioCinema, news and magazine content platform JioNews, music streaming platform JioSaavn, and “emerging digital platforms” in areas including education and health.
“Jio has been heralding the digital services revolution in India and will continue to do so in the years to come,” Mukesh Ambani said. “Given the reach and scale of our digital ecosystem, we have received strong interest from potential strategic partners.”
Business news website CNBCTV18.com reported that RIL wants to “mirror the likes of global giants like Alphabet, Amazon, Tencent, Alibaba and others which have a strong market cap and low net debt to equity ratio. It aims to create a financial structure that replicates and is in line with global technology peers”.