Macro Moves

How Reliance Jio is becoming stronger than ever?

Created on 17 Jul 2020

Wraps up in 4 Min

Read by 6.5k people

Updated on 08 Sep 2020

There's a famous scene from the Academy Award-winning movie Forrest Gump in which Tom Hanks (Forrest) takes part in a Rugby match. Nobody had any hopes from this guy because of his thin built. But then, suddenly, during the match when Forrest's team needs a winning point, the ball lands into his hands. He then hears the words "Run Forrest Run…" and he starts running. He runs and runs and reaches the other team's goal post. But, he doesn't stop and keeps on running. While running, he gets out of the stadium and reaches a road, and he continues to run. All the people try stopping him, but he's determined and keeps on running.

Here's why we shared this story with you. Reliance Jio, in recent times, has cracked various investment deals to become debt-free. And, it is not stopping there. The investments are still coming with the most recent one from global tech giant Google. In this newsletter, we are going to tell you how Jio has become stronger than ever and what could be expected in the future. This is also in line with the announcements made at the 43rd Annual General Meeting of Reliance Industries Limited. Keep reading to find out more.

Jio – Strong, Stronger, Strongest

Reliance Jio has had a tremendous impact on the Indian market since its launch. The venture-backed by India's richest man went on to become the top telecom operator and currently holds that position. With a plethora of investments coming in, the company has become debt-free but stares at a commanding future by partnering with the global tech giants like Google and Facebook. With the technological support from such established tech giants, it might be impossible for the competitors of Jio to impede its way and make way for themselves.

Let's talk about the deal which is going on between Reliance Industries Limited and Future Group. RIL is trying to buy Future Group's retail business. Although, the deal is stuck at the 30% haircut being demanded by Reliance. What this means is, RIL would pay back only 70% of the debt of Future Retail if the deal goes through. The concept is that when a business is acquired, its assets, as well as the liabilities, are acquired. Reliance is seeking some relaxation to pay for the liabilities that Future Retail has undertaken. But more importantly, if the deal goes through, Reliance will get a strong offline distribution network, which will be beneficial to expand JioMart.

Meanwhile, JioMart will also receive technological assistance from Facebook and Google. So, it would not be a big deal for JioMart to capture the online as well as offline Indian retail market. This way, it will give a tough competition to Amazon, who currently holds the lion's share of the Indian e-commerce market. It is worth mentioning here that Jio Mart might soon become a part of the super app that will be jointly developed by Jio and Facebook.

A decade ago, India was underestimated by global tech giants, and investing community used to comment that India might not be able to produce the next Google. Now, the tables have turned, and the same community comments that no country might be able to produce the next Jio. And the reasons are quite logical. India possesses a strong demographic, and the Indian market is growing rapidly. It is one of the most attractive markets around the globe, and Jio is a market leader here. With the future plans of Jio getting wings from tremendous amounts of investments that too from renowned investors across the globe, Jio is set to rule the market. Take an example of 5G. Jio has announced that an indigenously developed 5G network will be launched next year. Also, Google will help Jio in developing entry-level 5G compatible smartphones. Now, think about the situation of other telecom companies after this is executed. Won't we be moving towards a monopoly? But what exactly does the future entail, we'll have to wait and watch.

What are Supports & Resistances?

One of the most basic ideas while trading stocks that every broker should know is "Supports and resistances". If you are now associated with the market, you may have heard, or wiggled terms such as "Nifty50 has major resistance at 10,800 points" or "Stock XYZ has a support line Rs 105". Overall, what exactly do brokers mean by these terms in their examination? We will examine this in this article.

In this article, we will examine what supports and resistance, their features, and how exactly to use them.

Click the here to read more.

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Deb P Samaddar

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