JIO Case Study

About JIO
 Reliance Jio Infocomm Limited is an Indian telecom company which is a subsidiary of Mukesh Ambani-led Reliance
Industries Limited (RIL).
 It’s headquartered in Mumbai, Maharashtra.
 Jio was launched on December 27, 2015.
 The telecom service provider operates a national 4G LTE network with coverage across all 22 telecom circles in India.
 Reliance Jio has over 38.8 crore subscribers. Now it is the biggest telecom company in India.
 Financial Data
 Revenue ₹18,632 crore (US$2.6 billion)
 Operating income ₹3,631.2 crore (US$510 million)
 Net income ₹ 1,148 crore (US$160 million)
 Total assets ₹187,720 crore (US$26 billion)
 Total equity ₹70,864 crore (US$9.9 billion)

JIO turned profitable within less than 18 months of its commercial launch.

The telco created a world record in customer acquisition in one month of its commercial launch. It is the fastest by any other
company including Facebook, WhatsApp and Skype.

The Indian conglomerate has spent nearly Rs 4 lakh crore to build Reliance Jio.
 5 deals which made Jio India’s biggest
tech company

 Facebook-Jio deal: Mark Zuckerberg-owned social media giant said it will pour US $ 5.7 billion or Rs 43,574 crore into
RIL’s digital arm. The investment valued Jio Platforms at Rs 4.62 lakh crore or $65.95 billion pre-money enterprise value
(assuming conversion rate of Rs 70 to USD) for a 9.99% equity stake in the company on a fully diluted basis.
 Silver Lake-Jio deal: On May 4, Silver Lake, a private equity firm which invests mainly in tech companies, said it will invest
Rs 5,655.75 crore or US $ 750 million into Reliance's digital play ‘start-up’ for a 1.15% stake in the latter. The investment
valued Jio at an equity value of Rs 4.90 lakh crore and an enterprise value of Rs 5.15 lakh crore. Silver Lake valued Jio
12.5% (equity valuation) more than Facebook’s investment.
 Vista Equity Partners deal: Global investment company Vista put Rs 11,367 crore or US $ 1.5 billion into Jio for a 2.32%
equity stake in the latter. The deal announced on May 8 was worth 52% of the total market capitalisation of parent RIL at the
point.
 General Atlantic-Jio deal: On May 17, American private equity firm General Atlantic said it will shell out Rs
6,598.38 crore or $850 million to buy 1.34% stake in the Indian digital services platform company. The
investment valued Jio Platforms at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16
lakh crore.
 KKR-Jio deal:  KKR bought 2.32% stake in Jio which by May 22 had emerged one of the largest Indian
companies by valuation, 1.7 times the size of its peers Airtel and Vodafone combined. With an investment of
Rs 11,367 crore, KKR which made its biggest bet in Asia through the investment pegged an enterprise value
of Rs 5.16 lakh crore or US $ 68.37 billion.
After raking in a whopping investment booster dose of Rs 78,562 crore, RIL still retained 83% of the company
which claims to have 388 million subscribers. For reference, if Jio was a country, it would be the third most
populous in the world. It is, therefore, no surprise that investors poured in billions of dollars.
 Market Capitalization
Reliance Jio is now worth 1.75 times that of
its closest competitor Airtel.

Company Market Capitalization

Reliance Jio RS. 4.9 lakh crore

Airtel RS. 2.8 lakh crore
Vodafone Idea RS. 12,068 crore
According to the annual report 2017-2018, the company has :

 Obtained approval from the members to offer and issue up to 300,00,00,000 – 9% Non cumulative optionally convertible
preference shares of RS. 10 each for cash, at premium of Rs. 40 per OCPS aggregating to RS. 150,00,00,00,000 to the existing
Equity shareholders of the company on Right Basis.

 Obtained approval from the members to offer and issue up to 600,00,00,000 – 9% Non cumulative optionally convertible
preference shares of RS . 10 each for cash, at premium of Rs. 40 per OCPS aggregating to RS. 300,00,00,00,000 to the existing
Equity shareholders of the company on Right Basis.

 Issued and allotted 22,500 -8.10% Secured Redeemable Non Convertible Debentures of face value of Rs 10 Lakhs each for
cash at par aggregating RS 2250 crore on private placement basis.

 Issued and allotted 7,500 -8.10% Secured Redeemable Non Convertible Debentures of face value of Rs 10 Lakhs each for cash
at par aggregating RS 750 crore on private placement basis.

 Issued and allotted 20,000 -8.32% Secured Redeemable Non Convertible Debentures of face value of Rs 10 Lakhs each for
cash at par aggregating RS 2000 crore on private placement basis.

No. of shares 44747489995

% of total share of company 99.44
 Why JIO did not bring IPO
Mukesh Ambani said in the last annual general meeting that Jio and retail businesses will go for IPOs within 5 years, which
is a long window.
Bank of America Securities said in its recent report that Jio will be able to raise $16-17 billion through the IPO of 25 per
cent minimum free-float at the present valuation of $65 billion.
By getting financial investors who could own additional 10 per cent of company, RIL could reduce dependence on a
future IPO for major cash infusions, the report said. Thus, the operating company Reliance Jio became a step-down
subsidiary of RIL.
As privately held companies have more autonomy than public ones. JIO first want to do its valuation by selling in its small
stake to others firms. In this way it will be easy for company to set it’s market price. In this way investors get quite high
price for their stakes .
 PRODUCTS

 Mobile broadband
 JioFiber
 JioPhone
 Fixed line telephone
 Mobile telephony
 Wireless broadband
 Internet services
 OTT Service
 JIO Apps
 JioChat - instant messaging app
 JioCinema - online HD video library
 JioCloud - cloud-based backup tool
 JioMags - e-reader for magazines
 JioMoney Wallet - online payments/wallet app
 JioSaavn (earlier, JioMusic) - for online and offline
music streaming in English and Indian languages
 JioSecurity - security app
 Jio4GVoice (earlier, JioJoin) - VoLTE phone
simulator
 MyJio - manage Jio account and digital services
associated with it
 JIO competitors

Operators Subscribers in Millions Market Share

JIO 331.1 30.5%

Airtel 322.9 29.8%
Vodafone-Idea 320.0 29.5%
BSNL 110.0 10.1%

Total 1084.0 100.0%