InvestorQ : Is it true that Qatar Investment Authority is taking a stake in Reliance Jio?
Rutuja Nigam made post

Is it true that Qatar Investment Authority is taking a stake in Reliance Jio?

Arti Chavan answered.
2 years ago

Qatar Investment Authority, the sovereign fund of the Kingdom of Qatar in talks with RIL to invest up to $1.5 billion in an INVIT that holds the fibre-optic assets of the Reliance telecom venture. This deal is yet to be confirmed by either side. An INVIT is an investment trust that used by companies to hive off their infrastructure assets into a separate SPV.

After monetizing Jio Platforms to the tune of $20 billion by selling a 33% stake, RIL is now looking to monetize its fibre assets via the INVIT route. INVITs were permitted by SEBI in 2014 and till date only a handful of players have made the best of that route. The INVIT model will help Jio become an asset-light digital services company and save on costs.

It may be recollected that RIL already has an INVIT for its telecom tower assets in which Brookefield of Canada has already invested Rs.25,215 crore. Jio Digital Fibre has a franchise consisting of 700,000 km of fibre-optic cables in India and this is expected to be hiked to 1.1 million km shortly. This has helped Reliance take these assets off its balance sheet.

As per the current plan of action, Reliance Jio will continue as the sponsor of the INVIT and retain minimum 15% stake while 85% will be sold to global investors. Qatar Investment Authority is one such investor in this INVIT. This makes sense for QIA as government recently announced to exempt sovereign funds investing in India’s infrastructure from tax.