Jio, the telecom branch of its parent company Reliance Industries Ltd has emerged as the leading player in the Indian telecom industry, While birthed just 3 years ago, it has already wreaked havoc on the previously monopolised industry.
Now it seems that Jio has trumped even top-notch blue-chip companies in terms of market valuation. If it were to be listed today Jio will be the fifth-largest company by market cap. According to the BSE Sensex, while Jio is valued at Rs 4,40,141 crores its competitor Airtel is valued at Rs 2,75,751 crores. Jio has even surpassed India’s largest bank S.B.I securing its position as a stalwart of the Indian market.
The reason behind these impressive statistics seems to be the premium that the U.S based Facebook paid for a 9.99% stake in the company.
“According to KR Choksey Shares and Securities, on 20th April, a day before the deal, R.I.L was trading at Rs 1200 per share but on 21st April it dramatically rose to Rs 1300 per share leading to the increased valuation in market cap for the homegrown company. This meteoric rise seems to be due to the higher valuation of Jio by Facebook while buying a share in the company”
Jio’s presence in the Indian market may increase manifold as the 15000 crores it gets from Facebook out of the total 43,574 crores may be utilised in the development of its other apps like JioMart, JioMoney and Jio Cinema. These apps may grow to create a local competitor to companies like Amazon and Netflix.
Also Read: Jio-FacebookPartnership
While the speculated reasons behind Facebook’s interest in Jio range from tapping into the huge offline Indian population to richer data pools, the exact reason is still obscure. But what is sure is that Jio, Mukesh Ambani’s brainchild is here to stay and may unearth well-established giants like HDFC, ITC, and Airtel.