When other companies in the world are struggling to save their existence, Reliance industries has signed deals with four foreign companies such as Facebook, General Atlantic, Silver Lake, and Vista Equity Partner within a few weeks between lockdowns. Reliance industries have got a new engine of growth in the form of new commerce. When Ambani set up his new commerce venture in July 2018, he said that it has the potential to redefine India’s retail business and could become a new growth engine for Reliance in the following years.
How do two hunts with one stone, someone asked Reliance Industries (RIL) chairman Mukesh Ambani? When other companies in the world are struggling to save their existence, Ambani has signed deals with four foreign companies such as Facebook, General Atlantic, Silver Lake, and Vista Equity Partner within a few weeks between lockdowns. In fact, Reliance has got a new engine of growth in the form of ‘New Commerce’.
Investment of Rs 67,195 crore
Reliance industries got an investment of about Rs 67,195 crore from all these deals. A large part of this will be invested to repay Reliance’s debt. With these deals, Reliance is ready to take its car to the next station of growth – a $ 700 billion (about Rs 52,50,000 crore) ‘New Commerce’ opportunity.
What is Reliance’s new commerce
When Ambani set up his ‘New Commerce’ venture in July 2018, he said that it has the potential to redefine India’s retail business and could become a new growth engine for Reliance in the following years. Through this, Reliance will integrate the digital and physical market and exploit the vast network of MSMEs, farmers, and grocery shoppers. By entering into a deal with US giant Facebook, the company will take advantage of the wide reach of WhatsApp owned by it and will give a boost to its new commerce business.
Benefit for both
It is not so with these deals that only Reliance is benefiting. Their global partners also benefit from this. In the near future, many more investors will invest in Jio and the valuation that will increase will benefit General Atlantic, Silver Laker, and Vista.
Facebook will benefit from Reliance’s extensive network and connectivity in India and will be able to gain regulatory support for its many projects in this way.
Reliance Industries is developing Jio as a digital company, not just a telecom operator. Mukesh Ambani is now insisting on making Reliance a diversified company instead of maintaining an energy-focused company. Reliance Industries entered the retail business in the year 2006 and the telecom business in 2010.
Why do you want to become a tech-consumer company
In fact, Reliance may now be seen in future tech companies. Hence Reliance is establishing itself as a consumer plus tech company. Reliance CFO Alok Agarwal once said that the 3 big tech companies in the world have a market capitalization of $ 1 trillion, On the other hand, the total market capitalization of all energy companies has not been exceeded even after $ 600 billion. That’s why investors are now preferring to invest in tech-consumer companies like Amazon, Apple, Microsoft. Jio platforms are also moving in this direction, though it has to travel a long way.
