SUMMARY
Sovereign wealth fund Qatar Investment Authority could invest $1.5 Bn in Reliance’s infrastructure investment trust
The investment would monetise Reliance’s fiber assets, held by Jio Digital Fiber
Reliance chairman Mukesh Ambani has claimed that the company has already developed an indigenous 5G technology
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After raising around $20 Bn through a strategic stakes sale in its digital subsidiary Jio Platforms, Reliance Industries Limited (RIL) is reportedly in talks with sovereign wealth fund Qatar Investment Authority, with the latter looking to invest $1.5 Bn in RIL’s infrastructure investment trust (InvIT), which holds the company’s fiber-optic assets. The proposed investment by Qatar would monetise the company’s fiber assets, held by Jio Digital Fiber Pvt. Ltd.
Jio Digital Fiber has a 700,000 kms network of fiber-optic cables in India. Plans are afoot to expand it to 1.1 Mn kms.
“Fiber network business monetization falls exactly in line with RIL’s original plan to make Jio become an asset-light digital services company and save significantly on costs as the group is gearing up to offer affordable 5G services. It has an immense revenue generation potential,” sources told Mint.
Last year, Reliance’s InvIT holdings its telecom tower assets, received an INR 25,215 Cr investment from a consortium of companies led by Canada’s Brookfield Asset Management.
According to the current plan, Reliance’s telecom subsidiary Reliance Jio Infocomm will retain a 15% stake in the InvIT, while the remaining 85% will be sold to global investors such as Qatar Investment Authority. A recent announcement from Indian tax authorities exempted tax for sovereign funds investing in India’s infrastructure sector.
In its 43rd AGM held earlier this month, Reliance chairman Mukesh Ambani claimed that the company had developed an indigenous 5G technology, which would be ready for trial when the spectrum is made available in the country. Ambani had said that a successful demonstration of the technology in India would allow the company to rapidly scale-up the technology for export.
Moreover, Reliance Jio has also been hailed as one of the few telecom operators, in India and the world, who are not using any Chinese equipment for their network infrastructure. US Secretary of State Mike Pompeo has, in the past, called Reliance Jio a “clean telco”, while decrying Chinese telecom operators such as Huawei and ZTE for their alleged links with the People’s Liberation Army (PLA) of China.
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