Who is Mahendra Nahata? The HFCL founder whose ₹48 crore Jio bet could turn into ₹5,800 crore

Mahendra Nahata, the businessman who played a key role in Reliance Industries Ltd's telecom foray nearly 16 years ago, is set for a massive windfall from the proposed listing of Jio Platforms Ltd.

Nahata owns a 0.54% stake in Jio Platforms, acquired for just ₹48 crore in 2020.

According to brokerage firm Motilal Oswal's estimates, which value Jio Platforms at $114 billion, that stake is now worth around $611 million, or nearly ₹5,800 crore. 

This is an estimated gain of ₹5,752 crore, translating into a return of nearly 121 times his original investment.

Jio Platforms, incorporated on November 15, 2019, filed its draft prospectus on June 19 to issue 270 million new shares, a move that will reduce Reliance Industries' holding from 66.43% to 64.5%.

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Who is Mahendra Nahata?

Nahata is the Founder and Managing Director of HFCL, where he leads the company's overall strategy, planning, and new business development.

Over the years, he has been closely associated with several telecom industry bodies and policy forums. He has served on the Board of Governors of IIT Bombay, IIT Madras and IIIT Allahabad, besides being a member of the Council of Scientific & Industrial Research (CSIR) under the Government of India.

In 2003, Nahata was honoured with the "Telecom Man of the Millennium" award by Voice & Data. He has also served as President of the Telecom Equipment Manufacturers Association of India (TEMA), Co-Chairman of the Telecom Committee at FICCI, and Chairman of the Telecom Committee at the PHD Chamber of Commerce & Industry.

Nahata is a commerce graduate from St. Xavier's College, Kolkata. He founded HFCL in 1987. The company has evolved from a telecommunications equipment manufacturer into a technology company focused on internet and 5G infrastructure.

The company says it has built indigenous technologies backed by intellectual property and manufacturing capabilities, supplying mission-critical network solutions globally. It is also positioning itself for the next phase of telecom evolution, including 6G, while expanding into international markets.

Nahata's association with Reliance

Mahendra Nahata's association with Reliance's telecom journey dates back to 2010. 

According to a Mint report, on June 11, 2010, Nahata's Infotel Broadband Services won pan-India broadband wireless spectrum for ₹12,872 crore. Within hours, Reliance Industries acquired a 95% stake in Infotel Broadband for ₹4,800 crore, while Nahata retained the remaining 5%. Reliance subsequently funded the payment for the spectrum won by Infotel.

Over the following decade, Reliance invested billions of dollars into the telecom business. As its stake in Infotel Broadband - renamed Reliance Jio Infocomm Ltd in 2013 - rose from 95% to 99.44% by March 2018, Nahata did not infuse additional capital, leading to the dilution of his holding to below 0.5%, the report said.

How he got his Jio Platforms stake

When Reliance Jio Infocomm Ltd became a subsidiary of Jio Platforms in 2019, Nahata received financial instruments linked to his original investment, the report said.

In July 2020, about eight months after Jio Platforms was incorporated, the Nahata family - including his son and daughter - acquired a 0.414% stake (37.04 million shares) at ₹10 per share through the conversion of Compulsorily Convertible Debentures (CCDs).

At the same time, Reliance issued another 10.83 million shares, representing 0.121%, to the Nahata family, taking its total holding in Jio Platforms to 0.536%.

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Other Jio Investors Set For Windfall

Nahata is among several investors expected to benefit significantly from Jio Platforms' proposed public listing.

- Meta invested ₹43,574 crore, and its stake could be worth ₹1.2 lakh crore, a gain of ₹76,426 crore.

- Google invested ₹33,737 crore, with its holding estimated at ₹93,000 crore, a gain of ₹59,263 crore.

- Mubadala invested ₹9,094 crore, and its stake could be valued at ₹22,000 crore, implying gains of ₹12,906 crore.

- KKR and Vista Equity each invested ₹11,367 crore, with their stakes estimated at ₹29,000 crore, translating into gains of ₹17,633 crore each.

- Silver Lake invested ₹5,656 crore, with its stake potentially worth ₹22,000 crore, implying gains of ₹16,344 crore.

- ADIA invested ₹5,684 crore, and its holding could be valued at ₹14,000 crore, implying a gain of ₹8,316 crore.

- TPG invested ₹4,547 crore, with its stake estimated at ₹16,000 crore, a gain of ₹11,453 crore.

- General Atlantic invested ₹6,598 crore, and its stake could be worth ₹16,000 crore, implying gains of ₹9,402 crore.

Yet among all investors, Nahata's return stands out.

While global technology firms and private equity funds invested thousands of crores, his ₹48 crore investment has the potential to become ₹5,800 crore, making it one of the most remarkable gains from Jio Platforms' proposed IPO.