Mukesh Ambani: The Man Who Earned INR 90 Crore Every Hour Since March Lockdown
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The outbreak of COVID-19 pandemic got the entire world on its knees. Businesses, small and big, across sectors reeled under the impact of the economic fallout of the pandemic, with many even shutting shops. Even those who managed to stay afloat continue to remain financially fragile.
But, amidst the crisis, the richest man in the country, Mukesh Ambani, chairman and MD of Reliance Industries Limited (RIL) continued to increase his personal wealth every single day .
According to recently released IIFL Wealth Hurun India List 2020, Ambani continued to remain at the top for the ninth consecutive time, thanks to all the hefty investments RIL received from marquee global investors during the lockdown.
The chairman of the oil-to-telcom major managed to earn INR 90 crore every hour since the March lockdown and currently has a personal wealth of INR 6,58,400 crore, the IIFL Wealth Hurun report suggested. Globally, Ambani is the fifth richest person, as per Bloomberg Billionaires Index.
Investment Spree for 11 Weeks
Within the period of 11 weeks, RIL’s digital subsidiary Jio Platforms bagged investments worth INR 1,52,056 crore from 13 global investors.
The first and the largest investment came on April 22 from social media giant Facebook that bought the highest minority stake of 9.99 per cent in Jio Platforms in exchange of an investment of INR 43,574 crore.
The investment spree started as RIL geared up to get a slice of India’s retail pie through Jio Mart, a subsidiary of Jio Platforms. Mark Zuckerberg, in a post on Facebook, had stated that the purpose of the investment is to get millions of small businesses online. “India has more than 60 million small businesses and millions of people rely on them for jobs. With communities around the world in lockdown, many of these entrepreneurs need digital tools they can rely on to find and communicate with customers and grow their businesses. This is something we can help with -- and that's why we're partnering with Jio to help people and businesses in India create new opportunities.”
Facebook’s investment became a headturner for the investors, as they figured the market potential for digitization in a country with 1.3 billion population. Soon after, investment giants swarmed in to buy stake in jio Platforms. Silver Lake, an American private equity firm, invested INR 10,203 crore for an exchange of 2.08 per cent stake. Vista equity partners, an American investment firm, infused INR 11,367 crore to get 2.32 per cent stake. General Atlantic, another American growth equity firm injected INR 6,598 crore for 1.34 per cent stake. KKR invested INR 11,367 crore for an exchange of 2.32 per cent. Apart from these, others who invested were Mubadala, ADIA, TPG, PIF, L Catterton, PIF, Intel Capital, and Qualcomm.
The investment spree for Jio Platforms concluded with tech giant Google investing INR 33,737 crore for 7.73 per cent stake. As part of the investment, both the companies also partnered to develop an operating system for affordable 4g/5g smartphones in the country.
These investments combined with rights issued by Reliance Group helped RIL become debt-free much before its target of March 31, 2021.
Reliance Eyes To Dominate Retail Sector
Currently, Reliance Retail Limited, a subsidiary of Reliance Retail Venture Limited (RRVL), is operating business spanning supermarkets, consumer electronics chain stores, cash and carry wholesale business, fast-fashion outlets, and online grocery store JioMart. Launched in May, JioMart has tied up with Facebook-owned WhatsApp to deliver to 200 cities across the country. The online store is already known to give a steep competition to popular online grocery startup - Bigbasket.
During Reliance’s annual general meet, Ambani had laid out his plans for JioMart, which didn’t restrict to groceries. He expressed his intention to tap into electronics, fashion, pharmaceutical and healthcare space, thus throwing its hat into the ring for the top spot in the e-commerce sector in the country.
Soon after, RRVL acquired a majority equity stake in Chennai-based Vitalic Health Pvt. Ltd and its subsidiaries for approximately INR 620 crore to compete against Amazon’s Ámazon Pharmacy.’
RRVL also acquired Future Group’s business for INR 24,713 crore. This deal allowed Reliance to take over around 1,800 brick and mortar stores of the Future Group, which includes Big Bazaar, Nilgiris, Central, Brand Factory, and FoodHall, among others. Reliance currently operates around 11,500 stores in 6,600 towns and cities.
Silver Lake, KKR, and General Atlantic, who earlier invested in Jio Platforms, have again invested in RRVL. Silver Lake invested INR 7,500 crore for 1.75 per cent equity stake. KKR pumped in INR 5,500 crore for an exchange of 1.28 per cent stake and General Atlantic invested INR 3,675 crore to pick 0.84 per cent stake. These capital infusions have valued Reliance’s retail subsidiary at INR 4.285 lakh crore.