Months before Reliance Industries announced that Facebook would buy a 9.99 per cent stake in Jio Platforms — the holding company of its digital businesses — for ₹43,574-crore, both companies were at loggerheads. In January last year, at the 9th Vibrant Gujarat Summit, Mukesh Ambani, Chairman of Reliance Industries (RIL), advocated protecting India’s data from global corporations. In September, Facebook’s Global Affairs VP, Nicholas Clegg, countered that asking India to allow free flow of data across borders.
Seven months later, Ambani has joined hands with Facebook’s Mark Zuckerberg to collaborate on the vast data both collect in their ventures. So, what could have prompted both billionaires to come together?
Analysts call it a “marriage of convenience” – where each partner brings something to the table that the other lacks. With both sides tight-lipped about the deal, the nuts and bolts of the tie-up are shrouded in mystery. Analysts believe barring the investment announcement, most details are still being worked upon.
Facebook’s investment could bring RIL’s debt down at a time when cash conservation has become critical for leveraged entities. As per Hong Kong-based CLSA, RIL’s consolidated net debt and other liabilities were ₹2.35 lakh crore in 2019/20, down marginally from ₹2.40 lakh crore in 2018/19. “Cash infusion from this deal and closure of ₹7,000 crore stake sale to BP in the oil marketing JV should mean cash infusion of over ₹50,000 crore and bring down net debt,” says a CLSA report. Even as the modalities of the deal are being thrashed out, the industry stays circumspect about how things will move forward from here on.
Bu hikaye Business Today dergisinin May 17, 2020 sayısından alınmıştır.
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Bu hikaye Business Today dergisinin May 17, 2020 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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