Google buying a 7.73% stake in Reliance Jio telecom and digital unit Jio Platforms for $4.5 billion as part of its recently announced $10 billion India digitization fund.
Jio Platforms Limited, an auxiliary of the Company, consented to restrict arrangements with Google International LLC as per which Google would contribute Rs. 33,737 cr. for a 7.73% value stake in Jio Platforms,” RIL said in a statement.
With this, the total investment from financial and strategic investors into Reliance Jio Platforms stands at Rs. 1,52,056 cr. for a combined 32.97% stake in Jio Platforms in about two months.
Google is investing in Jio Platforms at an equity valuation of Rs. 4.36 lakh cr. The transaction is subject to customary regulatory approvals.
“Google has empowered millions of Indians to access helpful information and, like Jio, is a force for change and innovation. We welcome Google onboard and are excited about our partnership for what it can deliver to Indians, from universalizing 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.
The investment will build on Reliance Jio’s and Google’s existing efforts to expand the benefits of digitization across the length and breadth of India, beyond the current 500 plus million Internet users in the country.
Google buying a 7.73% stake in Reliance Jio, the Reliance Jio Platforms and Google have also entered into a commercial agreement to jointly develop an entry-level affordable smartphone with optimizations to the Android operating system with the Play Store.
“Reliance Industries, and Jio Platforms, in particular, deserve a good deal of credit for India’s digital transformation. The pace and scale of digital transformation in India is hugely inspiring for us and reinforces our view that building products for India first helps us build better products for users everywhere.”
said Sundar Pichai, CEO of Google and Alphabet.
“Google is proud to invest 33,737 cr. into Jio. I am excited that our joint collaboration will focus on increasing access for hundreds of millions of Indians who don’t currently own a smartphone while improving the mobile experience for all,” he added.
Reliance Industries Limited telecom and the digital unit, which mirrors the Alphabet-Google structure has now got 13 investors. US chipmaker Qualcomm became the latest to join a slew of technology-focused investors acquiring a slice of Jio.
India is a key market for the likes of Google and Facebook. The number of internet users in India is expected to rise to about 850 million in 2022, according to PwC. Up from 450 million in 2017.
Google rules search, video, guides, and email in India. 9 out of 10 smartphones sold in India come with Google’s Android OS.
The funds have helped Reliance Industries Limited pare debt. The oil-to-retail-telecom conglomerate said in June that it became a debt-free company after the first 11 back-to-back investments in Jio Platforms and an Rs. 53,124 cr. rights issue.
Reliance Industries Limited has been making efforts to position Jio Platforms and its telecom venture Reliance Jio Infocomm as more digital, consumer technology companies, key investors it has brought on board underline that strategy.