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Reliance Targets 500 Mn Jio Users Under Five-Year Plan For IPO

Reliance Targets 500 Mn Jio Users Under Five-Year Plan For IPO

Ambani is looking to raise capital from global investors for these two verticals

Retail and Jio have together contributed 32% to the conglomerate’s EBITDA this year

Ambani expects these two verticals to soon contribute 50% to Reliance’s earnings

Reliance Industries chairman Mukesh Ambani has said that its consumer businesses, Jio and Reliance Retail have “received strong interest from strategic and financial investors.” The company plans to induct global partners in these businesses over the next few quarters, and go for a public listing for both these companies by 2024. 

According to the company’s latest shareholder communication, Reliance Retail and Jio are said to have collectively contributed nearly 32% to the consolidated EBITDA of the Indian conglomerate, which is up from the 2% figure, five years ago.

“The day is not far when the share of Reliance Retail and Jio would be 50% to our total earnings,” added Ambani. 

He also noted that, if these two consumer businesses were separately listed companies, each would be ranked among the top 10 in India today, in terms of value.

$700 Bn Opportunity In Retail 

Talking about the company’s retail arm, Ambani noted that Reliance’s hybrid online-offline ecommerce initiative is a $700 Bn business opportunity. Last month, the company has announced the pilot launch of its hybrid ecommerce venture, which is now said to be ready for a large scale launch soon.

Under this venture, the company plans to bring together 350 Mn customer footfalls at Reliance Retail stores, 307 Mn Jio connectivity customers and 30 Mn small merchants all over India who provide the last-mile physical market connectivity.

The company is also working on a Point of Sale (POS) Solution – Jio Prime Partner POS, which is said to enable inventory management, customer relationship management, financial services and other services for small merchants. “This will modernise even the smallest neighbourhood kirana shop to become a future-ready digitized store,” said Ambani.

According to the latest company announcement, Reliance Retail has a turnover of over 130K Cr in FY2019 and has more than 10K stores across India. The company attributed this growth in revenue to be primarily driven by aggressive store addition and spurt in same-store sales. 

The company claimed to be growing at a rate of nearly 10 stores per day in the last two years. Reliance Retail is said to have added a total of 2.8K stores to its tally during FY 2018-19. As on March 31, 2019, Reliance Retail recorded 10,415 operational retail stores in over 6.6K Indian towns and cities.

Reliance Jio Drives Innovations In India

According to Ambani, Jio’s customer base has crossed 340 Mn users and is growing at the rate of 10 Mn new customers every month. “The potential for growth is immense, and 500 Mn mark is soon to be achieved,” he added.

Mary Meeker’s Internet Trends report has noted that the annual data usage of Jio network was between 17-18 exabytes (17 Bn -18 Bn GB) in the financial year 2018, which is almost two times growth from 9 exabytes data usage in FY 2017.

Leveraging its wide reach, the company has now announced its services for free, to  boost the Indian startup ecosystem. It has also partnered with the tech giant Microsoft and its Azure cloud vertical, to provide free Jio-Azure cloud services to tech startups by 2021. 

Further, Jio has also slashed the cost of its connectivity and essential business productivity and automation tools for Indian small businesses by 1/10th, making the services now available for INR 1.5K per month. 

Further, Jio is also set to launch its optical fiber based fixed-line broadband service — Jio Fiber in the next month, at the rate of INR 700- 10K per month. On top of Jio Fiber, the company is planning to launch a host of services such as Jio Holoboard, mixed reality (VR+AR) applications, gaming set-up box and an OTT platform.