Mumbai: After witnessing decent growth in over 33 months of its launch as a telecom network, Mukesh Ambani-led Reliance Industries Ltd (RIL) has proposed to invest Rs 20,000 crore in its telecom business Reliance Jio to fuel its broadband and 5G services, as per a report on Wednesday.
According to the report, the telecom firm will issue 4 billion non-cumulative optionally convertible preference shares to its parent at Rs 50 each for cash.
“Capital requirement for the telecom sector will stay high thanks to the constant infrastructure upgradation and the proposed 5G expansion. Jio is now focused on reaching out to India’s underserved homes and enterprise connectivity market. Its mobility services along with GigaFiber fixed-broadband services is where it is focusing now,” said an analyst at a domestic brokerage to The Mint.
He added that capital requirement for the telecom sector will stay high thanks to the constant infrastructure upgradation and the proposed 5G expansion.
Reliance Industries Ltd has an outstanding debt of more than Rs 2.87 trillion till 31st March, which expanded by Rs 69,000 crore during the year due to investments in Jio.
Jio, as of March, has built a subscriber base of 306.7 million and a income market share of 31.7 per cent, which is more than Airtel’s 27.3 per cent.
In the March quarter of FY 2018-19, Jio’s net profit rose over four times to Rs 2,964 crore, from Rs 723 crore in 2017-18, the company saw a revenue increment of 7 per cent to Rs 11,109 crore from Rs 10,383 crore in the December quarter.