Jio Platforms, the digital subsidiary of Reliance Industries, has announced stake sale to Qualcomm Ventures. The venture arm of Qualcomm Incorporated has agreed to invest Rs 730 crore for a 0.15 percent stake. This is the 13th deal for the company since it announced the first deal with Facebook in April. RIL has raised a total of Rs 1,18,318.45 crore through sale of 25.24 percent stake. Qualcomm Ventures joins Intel Capital as a minority stake holder in Jio Platforms. Also Read - Jio Platforms stake sale: Intel becomes 11th investor with Rs 1,894.50 crore investment
Jio Platforms: Unprecedented fund raising
Jio Platforms could be the biggest thing to ever come from India. It’s promise of digitally transforming the nation has found following among investors like KKR, Silver Lake, Vista, General Atlantic, Mubadala and PIF. With the addition of Intel Capital, the digital arm showed that it is willing to add strategic players as investors. Qualcomm, which is the driving force behind 5G, does not want to be left behind. The investment is another strategic play to stay in the fastest growing smartphone market. Also Read - Jio Platforms gets 11th investment; Saudi Arabia's PIF to invest Rs 11,367 crore for 2.32% stake
With this new deal, the company has an equity value of Rs 4.91 lakh crore and enterprise value of Rs 5.16 lakh crore. “The investment will deepen the ties between Qualcomm and Jio Platforms, to support Jio Platforms on its journey to rollout advanced 5G infrastructure and services for Indian customers,” Qualcomm said in a statement. After the PIF deal, it seemed like Jio Platforms won’t sell any additional stake in the company. Also Read - Reliance Jio finds 9th and 10th investment from TGP and L Catterton; Jio Platforms investment up to Rs 104,326.95 crore
However, it is now giving away smaller equity to strategic partners. We could see more such deals but it is not clear what percentage of equity stake RIL plans to sell. Reliance Jio, which is a fully owned subsidiary of Jio Platforms, has over 388 million 4G subscribers. It is also the one poised to deploy 5G first in India once the government completes the auction process. It’s greenfield 4G network is being promoted as capable of being switched to 5G with the help of software.
With Qualcomm onboard, the company will have one of the strongest partner with deep interest in 5G. In India, commercial 5G services are not expected to commence until 2022. However, when it does, most 5G smartphones will use Qualcomm Snapdragon 5G chipsets. This partnership could allow Jio to build it’s 5G infrastructure that takes the most advantage of Qualcomm’s 5G modem. For now, the technology arm of RIL continues to add high-profile investors while the pandemic is slowing the economy.