EXCLUSIVE: Inside the Reliance Jio deals – Akash Ambani was the one to choose Facebook, the next big investments and the ideas sold to investors

• Business Insider brings the inside details of India’s most talked about investment – Reliance Jio.
• Jio has already raised nearly ₹1 lakh crore by giving away 21% stake in the company.
• Next up is an investment from Saudi Arabia’s sovereign wealth fund, which could be followed by TPG Capital, and any one of the two, Google or Microsoft.
• Here’s how the Ambanis got the biggest investments in the middle of a lockdown.

Since March, India has heard about two things happening repeatedly – the lockdown being extended and Reliance Jio raising money.

With 10 investments in eight weeks, Jio has already raised ₹104,326.95 crore (over $13.8 billion) by giving away 22% stake in the company. From Facebook to the latest from TPG and L Catterton, the investments have taken Jio Platforms’ equity value to ₹4.91 lakh crore and enterprise value to ₹5.16 lakh crore.

Akash Ambani chose Facebook

While the breakneck speed of investments has got everyone in awe, at the Ambani household it’s building up as business as usual with Mukesh Ambani’s eldest son Akash taking charge.

In 2014, Akash Ambani had joined Reliance’s telecom unit, two years before Jio was formally launched in the market. Ambani, then 22 and a fresh graduate from Brown University in Economics, had joined the company a little earlier than his father Mukesh, who was brought back from Stanford to join Reliance at the age of 24. Akash was set to be a part of the company’s then ambitious 4G venture.

And now, the young Ambani is leading the Jio deals, two sources told Business Insider. “Akash was the one to choose the Facebook deal. He has a lot of say in the deals. They decided on Facebook as the first investor because it comes with Instagram and Whatsapp,” a source told Business Insider.

While the deals are being closed by Akash and the Reliance veteran Manoj Modi⁠— also the CEO of Reliance Retail ⁠— having Mukesh Ambani as the father and the Chairman of the company helps. “It’s easy when it's Mukesh Ambani. Investors only looked at how secure the money is and the reputation of the people who are running it. There are three things behind the deals – trust and reputation of Mukesh bhai, hard work of Akash and his team at JIO, plus the deal closure skills of Manoj Modi,” a source told Business Insider.

Former international financier Anshuman Mishra shared something similar on Twitter.


Inside the deals from Abu Dhabi

The Abu Dhabi Investment Authority and the Mubadala Investment Company both come under the Abu Dhabi royal family and have both separately invested in Jio. Sources told Business Insider that the discussions on the deal began on April 22 and were wrapped up before Ramadan.

“Within two-three years if Reliance Jio goes for a $100 billion IPO (initial public offering) then these companies would have got a 30% return, whereas private equity firms also offer 25% return. They will double the money in 3 years and that’s why they are excited. Mukesh Ambani’s track record, good management where they made a bold call and invested billions of dollars in Jio has proven beneficial. Now they are just diluting a bit out of it,” one of the sources said.

Mukesh Ambani had already said in his ast AGM that both the verticals— Retail and Jio ⁠— will be separately listed companies in the next five years.

The promise of Jio

Jio, which was launched in 2016 and in less than four years went on to become the largest telecom provider, got the investors interested, more so because of the plan in store.

“A jio is not just a telecom player, they are expanding like anything, the next big wave will be jio fiber. Honestly, the kind of demand they are getting right now, they are not being able to apply. And there are multiple reasons for the jio fiber demand, it will be a gamechanger in the broadband space and will hurt a lot of people. There will be an impact on the DTH players as well when Jio will bundle cable and internet services,” said Karan Chechi, director at TechSci research.

Jio Fiber was launched in 2018, and the company is now planning to increase its user base to over 2 crore subscribers and soon, cover 99% of the population.

But Jio is not rushing for the IPO. “None of the investors have dictated anything - the Jio story is that good and impressive. No intervention from the investors for the IPO, all the shots are being called by the promoter, that is Reliance ,” a source told Business Insider.

More deals in the next few days

The next investment is set to come through from Saudi Arabia’s sovereign fund – Public Investment Fund, which comes under the royal family of Mohammad bin Salman‎. MBS, as he is popularly known, is one the biggest tech investors. Some joke that Silicon Valley is funded by MBS – with investments in Uber, Lyft and $45 billion in SoftBank’s Vision Fund.

The deal is set to be closed in the coming week. But that’s not it. TPG Capital, a leading Private Equity firm, is the latest to start talks with Jio, a source told Business Insider.

And then, Reliance Jio gets to pick between Google and Microsoft for the last tranche of investments, two sources in the know told Business Insider. “The ball is in Reliance’s court – they get to pick and choose. They will decide what is the best strategic fit for Reliance and will evaluate how smart the money is,” said the source.

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