Have you ever wondered how much money did the world lose during the pandemic period?
Well, as per the Asian Development Bank, the global economy can experience losses worth up to $8.8 trillion. Yes, this figure showcases the bona fide situation of the world. While investors have lost millions and billions during this period, there was one man who had different plans. This man was Mr. Mukesh Ambani, who currently is the owner of more than 30% share of the Indian Telecom Markets. Reliance Industries has now become the first $150 bn company of India and aims to capture more than 50% of the market by the year 2025.
How is it changing?
Ambani rules an enhanced exhibit of segments: Jio is India's driving telecoms transporter, Reliance Retail Limited is its top physical retailer, Reliance's Network18 Media and Investments Limited is one of its largest news systems, and Reliance's Jamnagar is its biggest oil complex. His realm likewise claims Jio Studios, a film delivering studio and runs the Indian Super League.
Jio Telecom, a technology upstart, has emerged as a winner during this lockdown as the urge to transform India into a digitalised economy has increased by leaps and bounds. For Indian shoppers who prefer to buy groceries online, Reliance aims to launch JioMart, a grocery ordering service with the support of WhatsApp messaging. For Bollywood fans who would now prefer to avoid crowded theatres, it is introducing Jio Glass which will convert home-theatre systems into a much realistic experience.
With Silicon Valley companies like Google, Facebook, Silver Lake Partners, etc. stepping in, Reliance has now raised a total of Rs. 1,52,056 crores by selling 32.94% stake to foreign entities. The money raised was utilized for paying debts worth Rs. 1,61,035 crore, and this made Reliance net-debt free on 19th June, 2020. By entering into everything from groceries and textile to banking and technology revolution via an amalgamated system running through Jio, Ambani believes that Reliance can become India’s Global technology Powerhouse.
Why are companies Investing?
India is the second most populated country in the world with a population of more than 135 crore. Therefore, the scope and market is huge which can provide Jio an edge over other companies.
Jio is the market leader in its segment and has proved its worth to the investors by means of turning the company net-debt free.
With an inclination towards making India self-reliant and a digitalized economy, investing in Jio can be considered to be a good move.
Jio has a regulatory advantage as the matter of foreign ownership has created rifts in the past.
With the scope of entering into future endeavors like Artificial Intelligence (AI), Blockchain, Augmented Reality (AR), and many other sectors, Reliance Jio seems to be the perfect suit.
Therefore, it is crystal clear from the above points that Reliance has been able to capture the markets based on its strong foundation and clear commitment to make India the fastest growing economy in the world. With the likes of unicorns such as Facebook and Google stepping in, the platforms that were used to conduct technological innovations have observed a positive change and this will prove to be vital for the long-term growth of the company.
One Nation One Company?
The major question that arises over here is should the control of the economy be entrusted to just one company. Is it right to let Reliance influence the majority of the operations which can make India dependent and can be a major source of concern for the economy in the future? Reliance has been aiming for India’s growth and is trying to making the country self-reliant, but will it be able to survive in the long run?
But why has Ambani been selling out his company’s stake to global investors when he has too much confidence in the future of the company? Why is he aiming to make Reliance debt-free when some amount of debt doesn’t hurt, but actually benefits the company in its operations? Is being debt-free the only reason to sell out more than 1/4th stake of the company?
The speed with which Jio is expanding operations has opened the eyes of many analysts who are demanding answers to these questions by analysing the situation of the company. Maybe, this initiative of Jio is actually going on the right track as was expected by Mr. Ambani. But there can be other sides of the story too. Remember, Tata Docomo? An initiative by the Tata Group to enter into the telecom industry which turned into a huge flop and caused them a net loss of a whopping $1.3 bn. The main reason behind the entire process was faulty management and poor marketing to make people aware of the benefits of the product. With new players coming in and swooping the market, Docomo failed to meet its operating costs and ultimately had to sell off its assets and take an exit from the industry. So, this can be a major point that can hurt the future operations of Reliance.
When giants like Tata have failed to enter into other segments and have sustained huge losses, how is Reliance on treating the entire process to be a cake-walk session for the company? Though there’s a less probability that Jio will end up in a similar condition based on the fact that it has the most updated technology in its store and with the support of giants like Facebook and Google, it will soon launch 5G as and when they receive the go through from the government.
Conclusion
A sound management system and proper operational assets form the key to the survival of any company in the market. There’s a huge difference between what is portrayed in the books and what is actually going on inside the company. With Reliance having the necessary resources at hand and the trust of the majority of its investors, it’s initiative to enter into different segments has actually been a hassle-free process and has made them grow rapidly. Mr. Ambani aims to make the company the go-to solution for every problem faced in the country. There will be just one app where you can buy groceries, play games, order medicines, watch movies, choose clothes, and do many other things.
The ambition of Asia’s richest man to make India a tech giant can actually turn out to be a huge step in framing the future of the nation. At this point in time and with the current scenario at hand, we can just hope that the initiatives of this company help in setting the stage for making India a developed economy and act as the foundation of Self-Reliance. (pun intended)
"Success is not final; failure is not fatal: It is the courage to continue that counts."
