India’s Reliance Industries on Wednesday said Alphabet Inc’s Google will buy a 7.7% stake in its digital unit for Rs 33,737 crore, winning the backing of another US tech giant after Facebook Inc in late April.
With Google’s investment, strategic and financial investors have committed a total of 1.52 trillion rupees ($20.22 billion) in the last few months, Reliance chairman and billionaire tycoon Mukesh Ambani said at the company’s annual shareholders meeting hosted via a webcast.
Reliance’s digital unit Jio Platforms houses music and movie apps but its mainstay is telecoms firm Jio Infocomm – India’s largest mobile carrier with more than 387 million users.
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Jio Platforms is the digital services arm of Reliance Industries, which houses telecom company Reliance Jio Infocomm.This is the fourteenth investment in Jio Platforms since 22 April.
Earlier, Google CEO Sundar Pichai on Monday announced that the company would be investing nearly Rs 75,000 crore into developing infrastructure and funding digital innovation in India over the next five to seven years.
Pichai was speaking at the sixth edition of Google for India conducted in collaboration with the Ministry of Electronic and Information Technology, where a host of measures to be undertaken by the tech giant such as expanding the scope of digital payments using Google Pay and developing low cost smartphones to transition feature phone users into smartphone users were also announced.
“We are delighted to welcome Google as a strategic investor in Jio Platforms. We have signed a binding partnership and an investment agreement under which Google will invest Rs 33,737 crores for a 7.7% stake in Jio Platforms,” Mukesh Ambani said.
“Getting technology into the hand of more people is a big mission at Google,” said Sundar Pichai on Wednesday. “Together we are excited to rethink, from the ground up, how millions of users in India can become owners of smartphones. This effort will unlock new opportunities, further power the vibrant ecosystem of applications and push innovation to drive growth for the new Indian economy,” he said.
The investment by Google takes the cumulative fund-raising by Reliance Industries to Rs 2,12,809 crore in less than three months, which includes investments in Jio Platforms and the rights issue worth Rs 53,124 crore.
Analysts at Bernstein said last month that they expect Jio Platforms to reach 500 million customers by 2023, and control half of the market by 2025. Jio Platforms competes with Bharti Airtel and Vodafone Idea, a joint venture between British giant Vodafone and Indian tycoon Kumar Mangalam Birla’s Aditya Birla Group.
Google, which like Facebook reaches nearly every online user in India, said on Monday that it planned to invest $10 billion in Asia’s third largest economy over the next five to seven years.
Google joins a slew of private equity firms that have invested in Mukesh Ambani’s technology venture in the past three months. The investors in Jio Platforms include the US-based Facebook, General Atlantic, KKR and Intel Corporation, Abu Dhabi-based Mubadala and Abu Dhabi Investment Authority, and Saudi Arabia’s Public Investment Fund.
Jio Platforms also operates a range of digital services including a music streaming player and a video conferencing app. On Wednesday, Jio Platforms unveiled its newest offering: the Jio Glass.
Reliance Industries recently became the first Indian company to cross 12 million in terms of market capitalisation. By selling more than 25% stake in Jio Platforms and unveiling the rights issue, Reliance Industries has become a net debt-free company well before the scheduled date of 31 March, 2021.