Reliance has decided to infuse INR 1.08 Lakh Cr for the new company
The platform will manage operations for all of Reliance’s digital businesses
The services envisioned will be backed by blockchain, AI and machine learning technology
Mukesh Ambani-led Reliance Industries Ltd (RIL) has decided to set up a new digital services company to act as an umbrella platform for all the Reliance-owned digital businesses including Reliance Jio, MyJio, JioTV, JioCinema, JioNews and JioSaavn. The new company will fit between the parent company and the subsidiary Reliance Jio, and will make the telecom company debt-free, according to Ambani.
Ambani, in a press release, said the new company will be a “transformational” and “disruptive” digital service platform. He also added that the company will focus on services in healthcare, education, agriculture, commerce, government-to-citizen services, gaming and manufacturing sector among others.
The company’s board of directors have approved the formation and a capital infusion of INR 1.08 Lakh Cr for the platform. The investment will be in the form of a rights issue of optionally convertible preference shares (OCPS). Moreover, the new platform will also acquire RIL’s total equity investment of INR 65K Cr in Jio.
The new digital services holding company will be backed by investment in emerging technologies such as blockchain, artificial intelligence and machine learning. Moreover, it will be enabled by virtual, augmented and mixed reality, natural language processing and voice-enabled services.
The new company will be backed by emerging and next-generation technologies such as blockchain, artificial intelligence and machine learning. Moreover, it will also include virtual, augmented and mixed reality, computer vision, high performance and edge computing, natural language processing and voice-enabled services.
Reliance On Way To Become Debt Free?
This restructuring will help RIL to transfer all its debt to from Jio to the parent company, making Jio debt-free from March 2020. However, Jio will still be liable to spectrum related liabilities, RIL added.
But the INR 1.08 Lakh Cr investment will ensure that the new holding has negligible debt on the books, attracting more investors and strategic partners towards the company. According to media reports, with Jio’s debt-free status, RIL might also be looking at a public listing.
RIL has also claimed that it has already received proposals for various strategic partnerships. Ambani said that the company will be inducting partners to provide meaningful and best value for Reliance stakeholders.
During the annual general meeting held in August 2019, Ambani had announced the intention to make the RIL net debt free over the next 18 months. RIL, along with its subsidiaries currently hold a net debt of INR 1.57 Lakh Cr, as of September 30, 2019.
