On Friday, Reliance Industries Limited's (RIL) board approved the formation of a wholly-owned subsidiary for its digital businesses with an investment of Rs 1.08 lakh crore. It will be formed with a rights issue of optionally convertible preference shares (OCPS), the company said in a press statement.
The new subsidiary to be formed will include all of RIL's digital businesses, including Reliance Jio Infocomm, that will also acquire RIL's equity investment of Rs 65,000 crore in its telecom subsidiary. In total, RIL's total investment in the digital businesses will go up to Rs 1.73 lakh crore.
"Consequent to the above, RJIL will become virtually net debt free company by 31st March 2020, with exception of spectrum related liabilities," RIL said.
"Like global technology peers, the Digital Platform Company with negligible leverage makes a compelling investment proposition for both strategic and financial investors, many of whom have evinced strong interest in partnering with us. It will have significant financial strength to address the Digital Services opportunity in India," it further said.
"This new Company will be a truly transformational and disruptive digital services platform. It will bring together India's No.1 connectivity platform, leading digital app ecosystem and world's best tech capabilities globally, to create a truly Digital Society for each Indian. Jio has been heralding the digital services revolution in India and will continue to do so in the years to come," said Mukesh Ambani, RIL's Chairman and MD.
At the recent annual general meeting (AGM), Ambani had announced that the conglomerate was planning to utilise the potential of its telecom and retail ventures (Reliance Retail) with partnerships and would also be listing the two businesses separately in the next five years.