Reliance Industries, the most valued Indian company in the stock market, has bagged a number of global partnerships and investments in the recent past. This includes the Facebook-Jio deal which came as a pleasant surprise amid the gloom of coronavirus pandemic. The petrol to telecom conglomerate has some more deals in the cards for coming days even as the markets bear the brunt of the contagion and subsequent rout in oil prices.
Mohammed bin Salman
Crown Prince of Saudi Arabia
Proposed Investment: Rs 1 lakh crore
Mukesh Ambani had a warm chat with the Crown Prince of Saudi Arabia, Mohammed bin Salman in Febriary 2019, when the de-facto leader was visiting India. A major agenda during their discussions was Saudi Aramco's investment plans for India. Ambani, who had heavily invested in telecom (around Rs 3.5 lakh crore), wanted to reduce the debt of Reliance by roping in strategic investors. Ambani shared his plan to increase petrochemical production when electric mobility overtakes fossil fuels and the Prince was impressed. It culminated in 20 per cent stake sale plan in oil and chemicals business of Reliance at Rs 1 lakh crore. The deal is expected be delayed due to the crash of oil price.
Former CEO of BP plc
Investment in Reliance: Rs 42,500 crore
Proposed Investment: Rs 7,000 crore
It was in 2010, just after the Deepwater Horizon oil spill at BP plc's Macondo Prospect in the Gulf of Mexico, that the British oil giant decided to invest in new geographies. In January 2011, BP and Russian oil producer Rosneft announced a $7.8 billion strategic equity-linked partnership. Soon after, BP picked up 30 per cent stake in Reliance Industries's (RIL) major oil and gas blocks, including Krishna-Godavari (KG) D6 basin, for $7.2 billion (Rs 32,000 crore at that time). BP further contributed to the Rs 35,000 crore field development plan in R Series and Satellite blocks, despite the partners failure to turn the asset around. Moreover, RIL-BP formed a joint venture for fuel retail - another Rs 7,000 crore investment from BP. Dudley travelled to India many times during these years and he was escorted by none other than Ambani. Dudley also flew down for the wedding of Isha Ambani and Anand Piramal in 2018. Dudley retired from BP in March.
Founder of Facebook
Proposed Investment: Rs 43,574 crore
In early 2019, Ambani and Zuckerberg explored the possibility of a collaboration between their companies. Facebook has been frantically searching for new revenue sources, as it faced problems due to troublesome content and regulatory issues. The Facebook-Jio deal worth Rs 43,574 crore will help the social media giant expand its business with the help of Jio's network. Facebook wants to graduate to video socialising from texts. Besides, it wants partners across the world to launch its cryptocurrency, Libra. Complimentary to that Reliance is developing the blockchain technology and e-commerce platform JioMart. They have developed Calibra wallet, which allows users to store, send and spend money using Messenger, WhatsApp or the Calibra app. It can become the payment system for JioMart. Besides, Facebook is looking for markets for its products like Oculus (virtual reality gaming device), Workplace (for closed groups) and Portal (video calling device). It is also adding features to existing applications - Facebook, WhatsApp, Messenger and Instagram - to counter competition in social media space. Zuckerberg also needs a partner in India where problematic content and the regulatory headaches will surface as new challenges for the social networking giant. India should not become another China for Facebook - that's Zuckerberg's worry.
Investment: Rs 38,215 crore
Brookfield is an alternative asset management company with over $540 billion in assets under management in 30 countries. Their first attempt was to buy the tower assets of Anil Ambani group's bankrupt firm Reliance Communications in 2016-17. Last year, it bought the loss-making East West Pipeline of Mukesh Ambani, earlier known as Reliance Gas Transportation Infrastructure, for an enterprise valuation of Rs 13,000 crore. Canada's Brookfield Infrastructure Partners LP and its institutional partners had invested another Rs 25,215 crore in the telecom tower investment trust (InvIT) of RIL in December last year.
Ambani looks for investment in optical fiber InvIT also. The deal has not been finalised yet.
Chairman of Microsoft
No financial commitment
Ambani has a longstanding friendship with Microsoft founder Bill Gates. In 2014, Reliance had bought a minority stake in Terra Power, a US-based nuclear-technology design and engineering company that was founded by Bill Gates. But a stronger tie up between Microsoft and Reliance was in the making. In the last RIL Annual General Meeting, Ambani announced a partnership in cloud computing with Microsoft. Under the partnership, Jio will set up data centres across India, where Microsoft will bring its cloud platform, Azure. Satya Nadella, CEO of the tech giant was also virtually present at the RIL shareholders meeting.
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