It all started on April 22, when Facebook picked up a 9.9% stake in Jio Platforms for a whopping investment of Rs 43,574 crore. Since then, there has been a steady stream of big-ticket tech investors investing in Jio Platforms. It includes Facebook, Silver Lake, Vista, General Atlantic, KKR, Mubadala, ADIA, TPG Capital, L Catterton, PIF and Intel Capital.
Qualcomm Ventures and Google joined the party late but Jio now raised over $20.6 billion (Rs 1,52,055.45 crore) for a combined stake of 33%.
This begs the obvious question: Why is Jio Platforms so attractive to everyone at a time when the economic conditions are not good?
Reliance Jio a game changer
Jio offered free calls and data services at impossibly cheap rates, and this has more or less increased the competition. Mukesh Ambani, of course, pumped in $33 billion to construct a nationwide 4G broadband service network.
Along with offering its 4G LTE network at cut-throat prices, Jio also tied up with mobile handset companies like Lyf and offered a package of handset and call and data connection at rates that were impossible to match by other telecom players.
Aspiring plans
Apart from the call and data services, Jio platforms have a slew of digital apps and services including music streaming JioSaavn, on-demand live television service JioTV. Jio also has plans to bring new movies to people’s home on the same day of their theatrical release.
Jio has also entered into the video gaming category by launching a video call assistant to automate customer support. Then there is its payments app JioMoney. And of course, the newly-launched Jio Mart, which is expected to create huge trouble for other players in the Indian e-commerce market.
Development of 4G & 5G handsets
Jio was looking to design an entry-level 4G & 5G handsets at affordable rates and the deal with US chipmaker Qualcomm looks strategic and will hit China's Huawei's 5G plans in India.
Also, Google's strategic partnership in Jio will help to make affordable smartphones to target 350 million people using 2G phones and help them upgrade their phones.
What's so special about Jio Mart?
The disruption that Reliance Jio pulled off in the telecom sector, may not be that easy in this so-called competitive e-grocery market in India. India’s e-grocery market size is pegged at Rs 6,201 crore ($875 million) and is expected to grow exponentially to hit Rs 1.03 lakh crore ($14.6 billion) by 2023.
But Jio Mart will soon take it to fight to a new playground with WhatsApp as it is the crucial link for Jio Mart. It is likely to power the payments offering, with a logistics network or the Kirana store ensuring delivery. And this is where Jio Platforms' tie-up with Facebook, which owns WhatsApp, plays an important role.
Currently, this platform has reached 2.5 lakh orders per day with a presence in 200 cities.
Rush towards overseas listing
According to reports flashed by Bloomberg, Jio Platforms is said to be in talks with a couple of banks for overseas listing which might take 12-24 months.
Teji or Mandi?
Jio has attracted more than half the $30 billion investment into telecommunications companies globally this year. Investors are betting on Jio’s access to India’s huge consumer market and its potential to shake up traditional industries in the country from retail to education and payments with its technology. With the potential listing at Nasdaq, Jio Platforms is in the position to become a world leader in its domain.
Thus our take is Teji as when the trend is to be "vocal for local", an Indian company is getting vocal to go global.
Teji Mandi is a proactive investment manager for everyone. To read more of our research, please visit https://tejimandi.com/research
