The way Alibaba’s Jack Ma transformed the face of Chinese business leadership across the globe by creating tech-based ecosystems in China, Mukesh Ambani of Reliance Industries Limited (RIL) is now moving ahead to create a similar ecosystem in India. This observation is made by an expert of BofA Securities.
It said that RIL is best positioned to create tech eco-system in India. “Similar to Alibaba and Tencent which created tech-based ecosystems in China, we find RIL best positioned to create a similar ecosystem in India,” it added.
“In 2-3 years, we expect RIL to have a captive mobile base of 500 million users, fixed broadband users of 15 million and SME base of 5-7 million. The company has also acquired stakes in 25 start-ups and is looking to lead India’s 4th Industrial Revolution,” the report said.
“We also find the company well placed to create Super-App (have 4-5 successful apps) and lead SME and kirana digitization. Also Jio unlike Bharti and Vodafone Idea, doesn’t use Chinese vendors,” the report said.
The Indian Govt in the last few months has tweaked some rules impacting China’s presence in India telecom, media and technology (TMT) space.
The key changes are amended the FDI policy for countries sharing a border with India by moving from the earlier automatic approval to the government, banned 59 Chinese apps to counter potential threat posed on sovereignty and security, asked e-com platforms to display the country of origin on products. Also, it has begun consultations on whether it needs to ban Chinese vendors for 5G.
“We expect these changes to potentially lead to a freeze/reduction of Chinese investments in India’s tech ecosystem. We don’t see much impact as there seems to be adequate liquidity chasing these start-ups,” the report said.
“We note that China has invested $4 billion in the Indian start-up ecosystem and 13 out of the total 28 Unicorns have been China funded. As of now, we also don’t see much impact on companies which are funded by Chinese investments,” it added.These are companies run by Indian founders and largely agnostic to where the capital comes from as long as reputation of investor is good.