UAE’s ADIA and Saudi PIF invest $507mn each in Reliance’s Fiber trust

By Rahul Vaimal, Associate Editor
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Indian multinational conglomerate company, Reliance Industries Limited said that the Abu Dhabi Investment Authority (ADIA) and Saudi Arabia’s Public Investment Fund (PIF) have invested $507.2 million each in buying units in Digital Fiber Infrastructure Trust.

The sovereign wealth funds from Gulf will acquire a total 51 percent of the share and rest of 41 percent will be held by various Reliance entities.

The latest fund infusion highlights the confidence of marquee investors in the ambitions of billionaire Mukesh Ambani to turn his conglomerate into a behemoth of retail and technology and pivot away from his staple oil-refining company that he inherited after his father died in 2002. He has already obtained investments of more than $25 billion from supporters such as Facebook Incorporation and Google.

Repeat investors

Both ADIA and PIF are repeat investors in Ambani’s conglomerate after plowing billions in his digital and retail units earlier this year. Recently, a subsidiary of ADIA revealed plans to invest $750 million in the retail arm of Reliance and $752 million in Jio Platforms Limited which is the digital services unit of the company. PIF also said that it was investing $1.5 billion in Jio Platforms.

The diversification is also key to Reliance’s future. The conglomerate reported a drop in quarterly profits following a drop in demand for transportation and aviation fuels due to the pandemic. Telecom and retail earnings cushioned the blow, but the hit in oil refining and petrochemicals that contributed almost 73 percent to the revenues of Reliance for the year ended in March could not compensate.

In its annual report, Reliance Industries listed ongoing talks with potential investors for the purchase of trust holding fibre assets. The group own a 1.1 million kilometre fibre optic cable network in India that penetrates more than 1,600 Indian cities and towns.

In an exchange filing earlier this month, the trust holding Reliance’s fibre-optic assets said that it was raising $5 billion (₹397.1 billion)  through borrowings and share sales to group units.

The fibre-optic asset investment follows the other deals in the digital, retail and mobile-phone tower properties of Reliance. The company had previously sold shares to Brookfield Asset Management incorporation in a separate investment trust that owned the group’s wireless tower assets.