Saudi's PIF, General Atlantic Explore Investment In Reliance Jio

Reliance Industries Chairman Mukesh Ambani.
Photo credit: Remy Steinegger/World Economic Forum, under Creative Commons license

The Public Investment Fund of Saudi Arabia alongside American private equity firm General Atlantic are exploring additional investments in Reliance Jio, after the telecom unit chaired by India's foremost businessman, Mukesh Ambani, recently closed on $8 billion in funding from investors including social networking giant Facebook. Bloomberg reports Saudi's Public Investment Fund and General Atlantic are considering purchasing minority stakes in Reliance Jio, the telecom division of Reliance Industries, which is notably India's biggest business conglomerate.

According to Bloomberg, General Atlantic is discussing a potential investment of between $850 million to $950 million in Jio and could reach a finalized deal by this month. The size of the potential investment from Saudi's Public Investment Fund, on the other hand, isn't known.

Investors are betting on Reliance Jio's reach in India's huge consumer market and its potential to disrupt other markets such as payments and retail. Jio debuted its telecom network in 2016 and notably racked up 16 million users in its first month of operations. Fast-forward till now, and that number has increased to nearly 400 million. In a relatively short time, Jio captured a significant part of India's telecom market, thanks to promotional strategies such as free domestic voice calls, very cheap data services, and virtually free smartphones. Such promotional strategies, however, come at a high cost and led the telecom unit to take on significant debt to fund its rapid expansion.

With the new funding being picked up, Reliance has committed to cut down that debt.