India: Qatar Investment Authority eyes $1.5b stake in JioFiber

FILE PHOTO: A general view of Reliance Jio headquarters is seen on the outskirts of Mumbai, India, June 1, 2016. REUTERS/Clara Ferreira Marques/File Photo

Sovereign fund Qatar Investment Authority (QIA) is in advanced talks with Reliance Industries Ltd to invest around $1.5 billion (about 11,200 crore) in an infrastructure investment trust (InvIT) that holds the company’s fibre-optic assets, two people aware of the development said on condition of anonymity.

After raising more than $20 billion through stake sales in the digital assets unit, Jio Platforms Ltd, the Mukesh Ambani-led Reliance is now looking to monetize its fibre assets held by Jio Digital Fibre Pvt. Ltd.

“Fibre 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,” said one of the two people cited above, requesting anonymity.

Citigroup Global Markets, Moelis and Co. and ICICI Securities Ltd have been hired by Reliance as investment bankers for the proposed deal with Qatar Investment Authority.

Last year, Reliance received a 25,215 crore investment in an InvIT holding its telecom tower assets from a consortium led by Canada’s Brookfield Asset Management.

Jio Digital Fibre has a 700,000 km network of fibre-optic cables in India and plans to expand it to 1.1 million km.

In March 2019, Reliance’s telecom subsidiary Reliance Jio Infocomm demerged its fibre and tower businesses into Jio Digital Fibre Pvt. Ltd and Reliance Jio Infratel Pvt. Ltd.

This has helped Reliance take these assets off its balance sheet. The two entities now operate independently, with Reliance Jio Infocomm as the sponsor.

According to the current plan, Reliance Jio Infocomm will continue as the sponsor of the InvIT and retain a minimum 15% stake, while the remaining 85% would be sold to global investors, including Qatar Investment Authority.

In its FY20 annual report, RIL said Jio’s 5G-ready network and extensive fibre assets would play a key role in the development of the 5G ecosystem in India, based on market dynamics.

“Jio’s extensive intracity fibre network, last-mile execution, seamless customer experience, along with attractive bundling of digital content and smart home IoT (internet of things) solutions, would be key differentiators,” the annual report said.

Jio has plans to offer state-of-the-art wireline services, which are all 5G ready. Currently, Jio Fiber has monthly plans ranging from 699 to 8,499.

This article was first published on livemint.com.

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.