India's Mukesh Ambani Cements $8 Billion Raise For Telecom Network

Photo credit: World Economic Forum / Valeriano Di Domenico, under Creative Commons license

U.S.-based private equity firm Vista just announced that it's investing $1.5 billion for a 2.32% stake in Reliance Jio, an Indian telecom outfit led by the country's biggest businessman, Mukesh Ambani. The investment comes on the heels on Facebook ponying up $5.7 billion for a roughly 10% stake in the telecom outfit and American private equity firm Silver Lake ponying up an additional $750 million also for a stake. Together with Vista's investments, the funding raised by Reliance Jio in less than three weeks adds up to roughly $8 billion, an impressive amount that seems more so impressive for being raised in a relatively short span.

Mukesh Ambani, a famed businessman who is nothing short of a figurehead in the Indian business world, debuted telecom network Reliance Jio in 2016. Jio gained millions of customers in a short time thanks to brash tactics such as offering free domestic voice calls, very cheap data services, and virtually free smartphones. In its first month of launch, Jio had courted 16 million customers. Fast-forward to 2020 and the telecoms brand has increased that number to nearly 400 million. Reliance Jio has succeeded in courting telecom partners from across the globe to help bolster its operations. Among its partners include Detsche Telekom, Millicom, Orange S.A., Telecom Italia, and BT Group.

Reliance Jio has become the primary growth driver for Reliance Industries, the Indian conglomerate chaired by Ambani. Reliance increased its revenue by 5% to $87.4 billion and posted a net profit of $5.3 billion in the fiscal year ended March 2020.