The Qatar Investment Authority (QIA) is in advance talking to Mukesh Ambani-led Reliance Industries Ltd (RIL) to invest the sum in the infrastructure investment trust (InvIT) named Jio Digital Fiber Pvt Ltd, which houses the fiber optic resources of the group.
The Sovereign Fund is providing about $1.5 billion (about 11,200 crore) to Jio Digital Fiber Pvt Ltd.
“Fibre network business monetization is precisely in line with RIL’s original strategy to render Jio an asset-light digital services firm and substantially save on costs as the sector is oriented towards providing competitive 5G services. It has an enormous capacity for raising sales, “said one of the people, calling for
confidentiality.
Mukesh Ambani-led RIL is now seeking to monetize the Jio Digital Fibre Pvt Ltd owned fiber assets. After receiving more than $20 billion in digital assets sales to Jio Platforms Ltd.
Reliance has recruited Citigroup Global Markets, Moelis & Co & ICICI Securities Ltd for the planned agreement with the Qatar Investment Authority as investment bankers.
Reliance Jio Infocomm, a telecom unit of RIL, had demerged its fiber and tower companies into Jio Digital Fibre Pvt and Jio Infratel Pvt Ltd in March 2019
This helped Reliance detach the balance sheet from these assets. Both organizations operate now independently and are supported by Reliance Jio Infocomm.
The strategy is currently in motion to ensure the stability of Reliance Jio Infocomm, as the sponsor of the InvIT. The remaining 85% will be sold to foreign investors and Qatar Investment Authority will hold a minimum of 15% of its interest.
The fund declaration was an exemption from taxes for sovereign investments in India’s infrastructure sector by the Indian tax authorities.
RIL said in its annual FY20 report, the 5 G network and robust fiber assets of Jio will play a crucial role in building the 5 G ecosystem based on market dynamics in India.
Jio Digital Fibre aims to extend fibre-optic cable network to 1.1 million km. Currently it has a cable network of 700,000 km in India.Jio Fiber already has subscription plans from ₹699 to ₹8,499 monthly.
Jio has proposals to provide state-of-the-art wireline networks, many of which are set for 5G.
