Are Jio’s fibre assets the next big investment target?

Are Jio’s fibre assets the next big investment target?

There’s been a fair amount of, apparently informed, speculation in the Indian business press recently about yet another deal involving Reliance Jio.

According to a number of reports, Saudi Arabia's Public Investment Fund (PIF) is considering investing as much as $1 billion in Jio's fibre assets. This would follow the PIF’s earlier hefty investment in Jio Platforms, the company that owns India’s largest mobile network operator and a number of other digital businesses.

Discussions with parent company Reliance Industries (RIL) on the proposed investment are said to be under way. The Saudi fund apparently decided to get involved after rival Abu Dhabi Investment Authority (ADIA) re-engaged with Jio on a previously stalled plan to invest about $1 billion in its pan-India fibre assets.

Of course both groups are already heavily invested in Jio Platforms, to the tune of an estimated $2.2 billion between them.

Regular readers will be aware that Jio Platforms’ fundraising efforts have attracted nearly $21 billion already, along with more than a dozen investors including US private equity firms Silver Lake, Vista Equity Partners, General Atlantic and KKR as well as Facebook, the Saudi PIF and the ADIA. Jio also divested its towers to Canada’s Brookfield in 2019 for about $4 billion.

As for the appeal of Jio’s fibre division, India is a country that is already among the most under-penetrated in Asia in terms of broadband connectivity, but demand is certain to grow and Jio has a large fibre network. All of these factors may well make investment an attractive proposition.

Whatever else happens, plans to reduce Reliance’s net debt to zero by March next year seem still to be well on track.

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