Going to the New York stock exchange or Nasdaq would make sense US-traded Chinese technology firms such as JD.com Inc and NetEase Inc are looking for an alternative home closer to the mainland in case tensions between Washington and Beijing escalate, as my colleague Nisha Gopalan wrote this week. Alibaba group holding limited held a secondary listing in HongKong in November. With Washington considering a range of sanctions against Chinese officials and firms as punishment for Beijing crackdown on HongKong now may be the perfect time to pitch American investors on the potentials of the other internet marketers with a billion-plus people.
A splashy overseas foray will be an unusual step for a family that brought the retail equity culture to India. Dhirubhai Ambani, Mukesh's late father who founded the empire, booked a football stadium in Mumbai in 1985 to hold a shareholders meeting for the polyester textile maker that he had floated eight years earlier.
But then Mukesh Ambani is already moving old furniture around as he pivots flagship Reliance Industries Ltd. away from an oversupplied energy and chemicals market. At the same time, he's beefing up the balance sheet after a seven-year, $100 billion debt-fueled the expansion. A big chunk of that was for Jio, the wireless carrier that has become India's largest in less than four years.
A $7 billion issue, Reliance's first in three decades, buttressed by more than $10 billion raised in a month from the sale of shares in unlisted Jio platforms may help cut the company's $20 billion of net debt to zero before Ambani's March 2021 target A US IPO should give Jio's new backers, including Facebook Inc., KKR & Co., Silver lake partners, and General Atlantic, a better valuation in capital markets that's deeper than Mumbai's.
Will Wall Street be so hospitable as to give Ambani say as $100billian valuation? Jio platforms, which is centered on the 4G mobile network, is the cornerstone of Reliance emerging triple play on the carriage, and contact and commerce. With almost 400 million customers under his belt, Ambani needs to prove he can garner at least $3 from each of them every month. Modest at that sounds it isn't an easy task when per-user revenue is at present only a little over half as much. The Coronavirus lockdown has ravaged India's Economy, setting its growth prospects back perhaps by several years. Mass markets consumers, who comprise Jiosuse base, have been badly hurt.
That's where a Tech cold war may help. Wall Street investors have been able to profit from the explosion of e-commerce in China, even though the likes of Facebook and Amazon.com Inc, are largely shut out of the people's Republic. If that access gets curbed by geopolitics, then Ambani's story becomes more compelling. He can offer the vision of a vast retail network that has Facebook's popular Whatsapp messaging system processing orders and payments for neighboured shops connected digitally to a billion-plus buyer. That could be a big draw, A US home is within Ambani's reach, especially if Chinese firms are forced to vacate.
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