Reliance Industries, India’s largest company in terms of market capitalization, on Friday, said Intel Capital has invested USD 253.6 million in its digital arm Jio Platforms for a stake of 0.39%. This essentially means the investment arm of the American technology behemoth Intel, has become the 11th investors to come on Jio Platforms’ cap table, barely two weeks after Mukesh Ambani, chairman and managing director of Reliance Industries said, the current phase of induction of financial partners in the digital venture has ended.
“Intel’s deep expertise across edge ecosystem, computing devices, and enterprise data center solutions can help Jio Platforms expedite on its ‘Compute To Cloud’ vision,” Sanchit Vir Gogia, the chief analyst, founder and CEO of Greyhound Research, said in a recent analyst note.
There is another segment where Jio can tap Intel’s resources. It is no secret that Jio harbors the ambition to play a bigger role in creating smart cities across India, which is one of the flagship initiative of the Indian government. Reliance has already launched its IoT cameras for homes, which aligns with the smart city vision. With Intel, which has RealSense technologies that use AI to offer vision‑based solutions, Gogia said, Jio can go enhance its portfolio of IoT devices.
Moreover, Gogia added, Intel can also help Jio foray into computing devices (laptops and tablets), just as Ambani had ventured into entry-level smartphones with its telecom arm, Jio Infocomm. On its part, Intel, which has been eyeing India’s digital transformation to expand its footprint deeper into the country, Jio Platform is one rare opportunity.
Since Jio Platforms is expected to roll out data centers for enterprise services, Gogia said, this investment will ensure Intel’s technology can be leveraged for the same. Without this investment, Gogia believes, Intel won’t have a fair and equal shot at Jio’s foray in Cloud, given that Intel’s archrival AMD is a portfolio company of Mubadala, which wrote Jio a USD 1.2 billion check for a 1.85% stake.
Gogia believes Reliance can potentially divest another 4-5% in Jio Platforms to raise additional money in the range of USD 2.6 billion to USD 3.3 billion.
P.S.: For more information on the recent investments, value that each investor brings to Jio Platforms, engagement with Microsoft, impact on Bharti Airtel, and the challenges the company can expect, read this research report by Greyhound Research.
Copyright © 2020 Greyhound Research. All rights reserved. You may share this research note using the options made available. Please don’t copy this research note (complete or parts) and distribute over the web and emails. Connect with us if you need clarifications.
Legal Note. The contents in this portal do not necessarily reflect the opinions, ideas, thoughts, points of view, and any other potential attribution to any contributor’s, commentator’s, or author’s past or future employers. No NDA’s have been broken. Email our Client Centricity Team to learn more on our NDA policy. Sources may come from both publicly available information and private individual conversations. In case of publicly available information, attributions have been added.