The Hindu Business Line : 2019-08-13

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TUESDAY AUGUST 13, 2019 • CHENNAI Pages 14 Volume 26 Number 192 ₹8 • • • Ahmedabad Bengaluru Chennai Coimbatore Hubballi Hyderabad Kochi Kolkata Madurai Malappuram Mangaluru Mumbai Noida Thiruvanan­thapuram Tiruchirap­alli Tirupati Vijayawada Visakhapat­nam Regd. TN/ARD/14/2012-2014, RNI No. 55320/94 Mukesh Ambani’s oil and data juggernaut set for bigger play Sells 20% stake in RIL to Saudi Aramco To roll out fibre broadband at ₹700 a month Targets zero debt by 2021 Reliance Jio. Recently, the company divested hard infrastruc­ture worth about ₹1.17-lakh crore into separate infrastruc­ture investment trusts, or InvITs, to unlock the value from these assets. OUR BUREAU Mumbai, August 12 For Mukesh Ambani, data is the new oil but on Monday he announced a slew of big-ticket initiative­s with the twin objectives of becoming a zero-debt company by 2021 and securing the future of both the telecom and petroleum businesses. These included one of the biggest foreign direct investment­s (FDI) in the country in addition to the rollout of the cheapest wired broadband service. Ambani chose RIL’s 42nd annual general meeting (AGM) on Monday to announce the “longterm partnershi­p” with Saudi Arabian Oil Co (Saudi Aramco), which has been supplying oil to RIL’s Jamnagar refinery “since its inception, every single day for 20 years”, and a ₹7,000-crore fuel retail network deal with BP. He also announced the rollout of ‘Jio Fiber’ from September 5, promising free voice calls for life from landlines, 100 Mbps minimum broadband speed at subscripti­on starting from ₹700 a month and a free HD TV set on a commitment to an annual plan. RJio offensive Strengthen­ed by the FDI deals, Ambani today announced his next big bet in the telecom space with the launch of optical fibre broadband services from September 5 bundled with a slew of freebies. Tariffs will start at ₹700 per month for 100 Mbps speed. The tariffs will go up to ₹10,000 a month depending on the data plan. Voice calls on the landline telephone given with the broadband connection will be free for life. The broadband connection will come bundled with OTT streaming video services. Users will also be able to watch movies the same day they are in released in theatres through a service called First Day First Show. “Unlike other industry players your company had the foresight to pre-invest in the network assets. I can report to you today that the investment cycle for Jio is now complete. This gives us tremendous operating leverage and superior returns on our investment­s for years to come,” Ambani told shareholde­rs at the AGM. WX While Etihad said it is “neither feasible nor responsibl­e” to pursue the Jet Airways deal, Volcan said it had dropped the idea on “further evaluation and considerin­g other priorities” from these two transactio­ns is about ₹1.1-lakh crore (₹1.03lakh crore from Saudi Aramco and ₹7,000 crore from BP). “We have a very clear roadmap to becoming a zero net-debt company within 18 months, that is, by March 31, 2021,” said the RIL Chairman. RIL had ended last year with a net debt of ₹1,54,478 crore and analysts had started raising concerns over the stretched balance sheet, especially since it invested ₹3.5lakh crore in its telecom venture The deal marks the biggest foreign investment in the history of Reliance, and is among the largest FDI investment­s in India, Ambani said, adding that “the coming year will mark the beginning of the most ambitious value-creation strategy in the history of Reliance.” The agreement with Saudi Aramco will cover all of RIL’s refining and petrochemi­cals assets, including its 51 per cent stake in a recently announced joint venture with British oil and gas firm BP plc to run retail fuel stations. The commitment Mega FDI deals Under the FDI deals, Saudi Aramco, the world’s largest oil producer, will buy a 20 per cent stake in the Oil to Chemicals (O2C) division of RIL for ₹1.03-lakh crore, pegging the enterprise value of the company’s most valuable business division at $75 billion. The O2C division will eventually be spun off into a separate company. ■ Analysis: A win-win deal ■ Deal with MS for cloud infra ■