On July 03, 2020, Reliance Industries Limited (RIL) announced Intel Capital’s decision to invest INR 1,894.50 Crore for 0.39% equity stake in Jio Platforms, a wholly-owned subsidiary of RIL. Intel Capital has invested at an Equity Value of Rs 4.91 Lakh Crore and an Enterprise Value of INR 5.16 Lakh Crore.
With this round, Jio Platforms has raised a total of INR 117,588.45 Crore (USD 15.78 Bn) from eleven global technology investors.
Before we discuss why this investment by Intel Capital is strategic, here’s a quick summary of the investments so far in Jio Platforms:
We at Greyhound Research believe, like all other investors, Intel Capital also bring strategic value to Jio Platforms. Here are the five areas where the former will contribute the most to the latter:
1/ Cloud Computing – Jio Platforms is expected to roll out data centres for enterprise services, and this investment will ensure Intel’s technology can be leveraged for the same.
2/ AMD Investment – Mubadala, another investor in Jio Platform, is significantly invested in AMD, Intel’s ace competition and sans this investment, Intel won’t have had a fair and equal shot at Jio’s foray in Cloud.
3/ SAP Partnership – Intel has a deep partnership with SAP, and this can allow Jio Cloud to be a front-runner in SAP Hybrid Cloud implementations in the future. Relevant and interesting to note that SAP workloads are amongst the top migrations to the Cloud and a significant revenue driver for partners.
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4/ IoT Ecosystem – Intel has advanced Edge computing offerings across processors, analytics, AI and the access to this technology can help Jio Platforms engineering teams make significant pace with their 5G technology and IoT ecosystem rollouts.
5/ Computing Devices – Similar to Jio’s foray in entry-level mobiles, Intel can help Jio launch computing devices (Laptops and Tablets) and accessories like cameras. Might help to note that Jio is already aggressively pursuing its ambitions to become a smart city vendor in which cameras is a key ask. Also, the company has already launched IoT cameras for homes for both Smart TV and surveillance purposes. Interestingly, Intel has RealSense™ technologies that use AI to offer vision‑based solutions. Of course, Intel’s expertise with processors for personal computing devices is a rather well-known story.
Succinctly put, Intel’s deep expertise across edge ecosystem, computing devices and enterprise data centre solutions can help Jio Platforms expedite on its “Compute To Cloud” vision.
Last but not least, we at Greyhound Research believe RIL can potentially divest another 4-5% in Jio Platforms to raise additional money in the range of INR 20,000 – INR 25,000 crore.
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.
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