Google acquires 7.7 pc stake in Reliance Jio; plans to build low-cost smartphone for India
Google is the latest foreign investor in Reliance's digital arm — Jio Platforms. The search giant is investing Rs 33,737 crore for a 7.7 percent stake in Jio.
This makes Google the second-largest minority shareholder in the company after Facebook. It also takes the total investment from financial and strategic investors into Jio Platforms to Rs 1,52,056 crore for equity dilution of 33 percent.
Reliance Industries Chairman Mukesh Ambani and Google CEO Sundar Pichai made a joint announcement at RIL's first-ever virtual Annual General Meeting today. This comes shortly after Google announcing a $10-billion digitisation fund for India.
The Google-Jio partnership will expand the benefits of digitisation across the length and breadth of India, beyond the current 500 million-plus internet users in the country.
Jio Platforms and Google have also entered into a commercial agreement to jointly develop an entry-level affordable smartphone with optimisations to the Android operating system and the Play Store.
The Android-powered device will run on Jio's upcoming 5G network, and aims to convert over 350 million 2G users of India to smartphone consumers.
Infographic: Anubhav Anurag | YS Design
Speaking of Google's investment, Ambani said,
"Google is a household name that has empowered millions of Indians to access helpful information and, like Jio, is a force for change and innovation. We welcome Google onboard and are excited about our partnership for what it can deliver to Indians, from universalising internet usage to deepening the new digital economy... We are excited to rethink how millions of users in India can become owners of smartphones. This effort will unlock new opportunities, and further power the vibrant ecosystem of applications."
The low-cost, entry-level device will be an upgrade to the Reliance JioPhone, which has not only brought millions of Indian feature phone users to the 4G network, but has also been instrumental in bridging India's digital divide since 2017.
Google CEO Sundar Pichai
Talking of the Jio partnership, Pichai said,
"This partnership is key to Google's future in India. Google is proud to invest in Jio. I am excited that our joint collaboration will focus on increasing access for hundreds of millions of Indians who don’t currently own a smartphone while improving the mobile experience for all. Jio Platforms deserves a good deal of credit for India’s digital transformation. The pace and scale of digital transformation in India reinforces our view that building products for India first helps us build better products for users everywhere."
Google's investment is the 14th fundraising deal by Jio Platforms in three months.
Prior to this, the $65-billion unit has raised capital from marquee investors like Facebook, Silver Lake Partners, Vista Equity Partners, General Atlantic, KKR, Mubadala, additional investments from Silver Lake, Abu Dhabi Investment Authority (ADIA), TPG Capital, L Catterton, Saudi Arabia's Public Investment Fund, Intel Capital, and Qualcomm Ventures.
Foreign investors are making a beeline for Jio Platforms because it gives them a foothold in one of the largest consumer markets in the world through a truly diversified products and services ecosystem. Reliance is also said to be considering a foreign IPO for Jio in the next 12 months.