Jio completes 100% acquisition of Reliance Infratel for ₹3,720 cr
Reliance Jio has deposited ₹3,720 crore in an escrow account of the State Bank of India (SBI) to acquire Reliance Infratel Ltd (RITL), under Section 31 of the Insolvency and Bankruptcy Code (IBC) 2016.
The National Company Law Tribunal, Mumbai Bench (NCLT), in its order on December 3, 2020, had approved the resolution plan submitted by Reliance Projects & Property Management Services Limited (RPPMSL), a wholly-owned subsidiary of Reliance Industries Limited (RIL), for the acquisition of RITL, which is one of the major private telecom infrastructure providers in the country.
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As per the approved resolution plan, Reliance Infratel has allotted “50,00,000 equity shares to Reliance Projects & Property Management Services of ₹10 each, for cash, aggregating ₹5 crore; and 3,72,00,00,000 zero coupon optionally fully convertible debentures of ₹10 each, for cash, aggregating ₹3,720 crore”.
With this, the existing paid-up equity share capital of Reliance Infratel stands cancelled, and now Reliance Projects & Property Management Services holds a 100% stake in Reliance Infratel. Reliance Infratel was incorporated in India on April 16, 2001. The overall turnover of RITL for FY22, FY21 and FY20 was ₹1,186 crore, ₹1,208 crore and ₹1,322 crore, respectively.
The RIL stock is trading 1.16% down at ₹2,565.05 today, after falling around 0.97% in the past five days.
After the allocation of 5G spectrum auction, Reliance Jio is pushing hard to ramp up infrastructure in the country. In order to build a strong pan-India 5G network and ensure countrywide 5G rollout by end of 2023, Jio has committed an investment of ₹2 lakh crore. It has also entered into a strategic alliance with global players, including Swedish telecommunications company Ericsson and Finnish telecommunications firm Nokia, to develop a 5G network in India.
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Reliance Jio plans to deploy a 5G standalone network, which will interwork with its 4G network. The network will enable Reliance Jio to deliver advanced 5G services such as massive machine-to-machine communications, network slicing, and ultra-low latency.
In another development, Reliance Jio has won Indian Oil Corporation Ltd's (IOCL) order for providing an SD-WAN solution that will power IOCL’s retail automation and critical business processes, such as payment processing, daily price updates, remote desktop protocol (RDP) software and network monitoring with enterprise-grade connectivity, quality of service (QOS) and 24x7 support across 28 states and 8 UTs. In a statement to the stock exchanges, RIL said: "JioBusiness, the enterprise arm of Reliance Jio Infocomm Ltd, will be deploying and
managing software-defined wide area network for IOCL across its 7,200 retail outlets for 5 years."