As anyone familiar with the Indian business scene knows, Reliance Industries Chairman Mukesh Ambani’s speeches at his company’s annual shareholder meetings are major news events, with television channels often streaming them live. Some of this, of course, has to do with Ambani’s investments in the news media.

But it is also a reflection of the attention commanded by India’s richest man – whose net worth has surged past that of Tesla founder Elon Musk and renowned investor Warren Buffet – ever since he unveiled Reliance Jio in 2016.

The telecom company, with the benefit of regulations working in Ambani’s favour, transformed India by offering free voice calling and data at dirt-cheap prices, making it the largest player in both revenue and market share less than four years since it was launched.

With his gamble having paid off, Ambani on Wednesday announced that the oil-to-retail-to-telecom group had become “zero net debt”, an aim that he had announced at the shareholder meeting a year before. He got there by securing investments from some of the world’s largest firms such as Google, Facebook and Intel, as well as major investment outfits like sovereign wealth funds from Abu Dhabi and Saudi Arabia, firms like KKR, Silver Lake Partners and more.

Here’s what you need to know.

What was Reliance’s big announcement?

Reliance Jio didn’t become the behemoth of the Indian telecom and data industry in such a short time by itself. This required the company to pick up massive amounts of debt, not to mention all the debt held by other sections of the Reliance group that is involved in everything from petrochemicals to grocery and clothing retail.

At the 2019 Annual General Meeting, Ambani announced that he intended to make Reliance Industries net debt-free.

Over the subsequent year, the company has announced deal after deal with a number of major global players bringing in Rs 152,000 crore by selling about 33% of its stake in Jio Platforms.

These include:

  • Rs 43,574 crore from Facebook.
  • Rs 33,737 crore from Google.
  • Rs 11,367 crore from KKR, an American global investment firm.
  • Rs 11,367 from Vista, a private equity firm
  • Rs 9,094 crore from Mubadla, a sovereign wealth fund from Abu Dhabi.
  • Smaller investments from General Atlantic, Silver Lake, Intel, Qualcomm and others.

Moreover, the parent firm Reliance Industries held a rights issue earlier in the year, raising Rs 53,124 crore in what it said was the world’s largest rights issue by a non-financial company in a decade and certainly India’s largest.

As Pallavi Nahata writes, this makes Reliance an economy unto itself:

  • “RIL has raised over Rs 2 lakh crore in the last few months via a rights issue and strategic investments. That’s about 1% of India’s FY20 nominal GDP. It is almost equal to India’s disinvestment target of Rs 2.1 lakh crore for FY21. Many see that target as ambitious.
  • Funds raised via strategic investors alone stood at Rs 1.5 lakh crore or roughly $20 billion. That’s 40.6% of India’s FDI inflows in FY20...
  • RIL’s turnover in FY20 was Rs 6.59 lakh crore, 3.2% of India’s GDP.
  • It’s contribution to the exchequer was at 5.3% as a share of India’s gross tax revenue.”

Why are Facebook and Google investing in Reliance?

This month, India banned 59 apps, all owned by Chinese companies, citing data concerns – though the real trigger was likely to have been the conflict between India and China on the disputed border between the two.

Sections of India’s “data sovereignty” movement have long called for India to put major fetters on all global companies that collect data.

Over the last few years, India has signaled its intention to move towards more protectionist laws governing the internet. A personal data protection law draft would have mandated companies keeping a copy of all the data they collected within India, with restrictions on what can flow abroad.

A draft e-commerce law seeks to give the government unfettered access to data. And policymakers, as well as representatives of companies like Jio, have repeated the idea that the data of Indians is a national resource, one that ought to be exploited by Indian firms and the government not global ones.

“Data is the new oil [in the new world order],” said Mukesh Ambani in 2019. “And data is the new wealth. India’s data must be controlled and owned by Indian people – and not by corporates, especially global corporations. Today, we have to collectively launch a new movement against data colonisation.”

This movement has also meant additional focus on the Indian operations of the US tech giants – Google, Facebook, Microsoft and Amazon.

Facebook has faced trouble getting its payments system, WhatsApp Pay, past regulators. Google is facing an antitrust investigation. And Amazon was told a few years ago, on Twitter, by a top bureaucrat that it “better behave”.

Although none of the companies will mention this in their slick press releases about investing in Jio, the presence of a Google and Facebook representative on the board of a company whose chairman is a master of navigating India’s regulatory thicket is likely to be seen also as a strong foothold in the Indian market, no matter how the laws change.

Of course, beyond this is the simple fact that Jio – with major investments in 5G and content, and a friendly regulatory regime – is set to expand even further into the data and internet space in the country, and so would seem like a solid investment bet for any player.

What were the other big announcements?

  • Reliance is getting into 5G. Mukesh Ambani announced that it will offer its own 5G network solution, making it a competitor to global companies like Ericsson and Nokia and under-scrutiny Chinese companies like ZTE and Huawei. Reliance has sought permission to test its own 5G gear, which it hopes to eventually be able to export as a “Made in India” network.
  • The company showed off Jio Glass, a mixed-reality product – combining what you see with images projected onto spectacles – similar to Google Glass, that it said would be used particularly for classroom situations as well as company meetings.
  • Google and Jio are working together on an Android-based operating system, and are even working to build an entry-level affordable smartphone that can take Indians off 2G and onto faster networks.
  • Reliance is next looking to bring in investors for its retail offerings. The company recently launched JioMart, a marketplace that connects consumers with shopowners primarily for basic groceries. It announced that JioMart will expand into fashion, electronics and phones. This will be alongside Reliance Retail, where the company sells directly to consumers.

Why did the share prices go down?

Despite all these announcements, and Reliance ending up net debt-free ahead of schedule, shares of Reliance Industries were actually down on Wednesday. This may have had something to do with Ambani’s statement that one of the big deals that had been in last year’s shareholder meeting had not worked out.

The company had planned to pull in a 20% stake, for Rs 103,000 crore or $15 billion in its petrochemical business from Aramco, the Saudi Arabian state oil company.

“Due to unforeseen circumstances in the energy market and the Covid-19 situation, the deal has not progressed as per the original timeline...,” Ambani said. “Nevertheless, we at Reliance value our over two-decade-long relationship with Saudi Aramco and are committed to a long-term partnership.”

He added, however, that the company had approached the National Company Law Tribunal to spinoff its oil-to-chemicals business into a subsidiary, in the hopes of drawing more investment in that segment.