Ambani vs Bezos: A $3.4 bn battle for a pole position in Indian market

 A vanilla commercial dispute is setting the stage for a clash between the world’s No. 1 and No. 6 richest men. But the legal wrangling is a sideshow. What Jeff Bezos and Mukesh Ambani are really fighting over is pole position in the only billion-plus-people consumer market available to both of them: India.

The ostensible battleground is a $3.4 billion deal Indian tycoon Ambani’s Reliance Industries Ltd. stitched up in August to acquire assets of debt-laden local retailer Future Group. Bezos’s Amazon.com Inc. is trying to block the transaction.

That, in itself, is a bit of a dampener. Expectations were building for the two billionaires to work together. In September, Bloomberg News reported that Ambani had given Amazon an option to buy as much as 40% of Reliance Retail Ventures Ltd., seeking to repeat the success he had earlier this year in bringing in Facebook Inc. and Alphabet Inc. as partners to his digital platform.

By seeking to stall Ambani’s purchase of Future, Bezos may be signaling that he would rather remain a rival. Or, that he’s buying time to sweeten the offer currently on the table.

Two Billionaires Fight Over a Billion Consumers

The actual quarrel is only interesting when you read between the lines of the claims and counterclaims.

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Amazon bought a 49% stake last year in a private firm controlled by Kishore Biyani, a pioneer of modern-format retailing in the country. The investment gave the U.S. e-commerce giant the right to acquire Biyani’s shares in the publicly traded Future Retail Ltd. from the third year. Another of Bezos’s conditions was that Biyani wouldn’t sell his assets — about 1,500 stores nationwide — to restricted persons, including Reliance, which operates India’s largest retail chain.

After the Future-Reliance deal was announced, Amazon alleged breach of contract and obtained an interim stay against the sale from an arbitrator in Singapore, a preferred neutral venue in Asia for settling disputes in cross-border agreements. The U.S. company then wrote a letter to Indian stock exchanges and the regulator, asking them to not approve the transaction.

Future Retail has challenged Amazon’s position by saying that the Singapore ruling has no legal basis in India, and that anyway, it wasn’t a party to the founder’s agreement. Given the debilitating impact of the Covid-19 pandemic on operations, the retailer says it’s doing the right thing by all stakeholders in selling assets to Reliance. As for Amazon’s claim of $193 million in damages plus interest, that liability, if awarded by the arbitrator, should fall on Biyani’s private firm that did the deal, Future Retail argues.

Biyani is just a pawn in a much bigger power play. Future's cash crunch didn't emerge suddenly. Amazon had ample opportunity to tiptoe around India’s legal restrictions on foreign ownership of retail chains to act as a white knight. But it didn’t.

Amazon may still be interested in partnering with Ambani — at the right price. Other investors, such as Silver Lake Partners and KKR & Co., have written him checks worth $5 billion in total. They may have feared losing out on what could become India’s most successful mix of physical and digital shopping, a strategy that leverages Reliance Retail’s own outlets together with independently owned neighborhood stores connected to Ambani’s 4G phone network of 400 million users. However, the portion offered to Amazon would mean a $20 billion commitment. Bezos could afford to see how well Ambani executes his plan.

Amazon’s India website kicked off its annual festival season last month to record sales in the first couple of days. Reliance Retail’s revenue also jumped 30% in the September quarter from the previous three months. But although India’s nationwide lockdown has ended, not all stores have reopened fully. Footfall has yet to recover, especially in fashion and lifestyle and at stores inside malls. In Macquarie’s estimates, the next fiscal year’s earnings per share for Reliance Industries, the holding company, may be 23% below the consensus street forecast. A reason, the brokerage says, is stiff competition, high investment and low margins in retail. Reliance Industries shares fell 8.6% in Mumbai on Monday.

Amazon’s letter to the Securities and Exchange Board of India makes a reference to India’s “ease of doing business,” which has been a sore point with foreign investors from Vodafone Group Plc to Cairn Energy Plc. The regulator needs to hold listed firms accountable for their dealings, Amazon said in the letter, according to Reuters, which has seen a copy.

The last thing India wants is more of a bad rap. The Seattle-based firm already has to operate with one hand tied behind its back: As a foreign e-commerce player, it can’t own inventory or openly discount merchandise. Even harsher rules — covering data and algorithms — may be on their way. It’s important for regulators to not give Amazon the chance to paint a commercial feud as another sign of India’s unfair treatment of global investors.

In more ways than one, a waiting game by Bezos may not be a bad idea.

RIL's net debt to fall despite struggling energy and delay in asset sales

Billionaire Mukesh Ambani-led Reliance Industries Ltd's net debt will fall even if energy and retail demand struggles for six months and the planned asset sales are delayed, said a research report by Morgan Stanley. RIL can re-prioritise investment, potentially slowing capex by up to a third.

Beyond COVID-19, RIL emerges stronger as competitors face high debt challenges and slow investments, PTI reported citing a Morgan Stanley research report. With the outbreak of coronavirus impacting economies globally, RIL faces multiple challenges -- oil prices have declined along with a fall in global oil product demand as a result of the lockdown across India and multiple geographies, potential slowdown in fashion/electronics demand for its retail segment, slower monetisation of telecom investments, and still relatively high debt post the investment cycle.

Morgan Stanley said the timing of normalisation is unclear, and every month of these challenges negatively affects RIL sales volumes across all its businesses. But competition is struggling even more, and cyclical businesses could get more medium-term tailwinds as capacity growth globally slows.

RIL's share price has dropped 21 per cent year-to-date, but still out-performed the market by 7 percentage points.

ALSO READ: Covid-19 lockdown: Fuel demand likely to slip 40% in April, says report

The organisation in its report said that the decline in global energy demand and expansion in credit default swap (CDS) spreads for RIL, to 290 bps over the past month, have raised investor questions about the company's balance sheet leverage. "Per our assessment, RIL's net debt (including other liabilities) would remain stable in FY21, if the COVID-19 situation were to persist for six months and recover only slowly thereafter."

RIL, it said, has the flexibility to prioritise its investments in FY21, and could thereby reduce cash outlay by 25-30 per cent. Still, capex on ongoing upstream gas production, telecom spectrum renewal, and maintenance may be required.

Jio will charge customers 6 paise per minute for voice calls, but will compensate them by giving free data of equal valueRIL's share price has dropped 21 per cent year-to-date, but still out-performed the market by 7 percentage points.

Stating that RIL's net debt might not rise in 2020-21, Morgan Stanley said its analysis suggests limited liquidity challenges even if the company's utilisation rates and margins remain challenges in its cash cow energy business.

"We expect Reliance to gain market share with better profitability as the current demand decline is driving global refiners and oil majors alike to reassess growth plans to conserve cash. This provides a significant headstart for RIL, which has expanded and upscaled its capabilities over the past five years and now is among the top quartile on the cost curve," it said adding oversupplied oil markets as chemical/ refinery markets tighten are a significant tailwind, as well.

RIL has consolidated net debt and liabilities of USD 46.2 billion and an annual pre-tax profit of USD 13.6 billion. The company has previously announced plans to monetise many of its assets, including holdings in energy, telecom, and content businesses. These plans, if executed, could lower debt by about USD 39 billion, but would also lower earnings by 16 per cent.

Asia's richest man Mukesh Ambani adds $18 billion to his fortune in 2019

It’s been a good year for Asia’s richest man, Mukesh Ambani. The Indian tycoon added almost $17 billion to his wealth as of Dec. 23, the most in Asia, taking his net worth to about $61 billion, according to the Bloomberg Billionaires Index. In comparison, Alibaba Group founder Jack Ma’s net worth grew $11.3 billion, while Jeff Bezos lost $13.2 billion.

The surge in Ambani’s fortune this year was fueled by a 40% jump in the shares of his Reliance Industries Ltd., a conglomerate that’s pivoting more toward consumer offerings than its core oil refining and petrochemicals businesses. The rally in the stock is more than double the gains for India’s benchmark S&P BSE Sensex index during the period.

Investors are piling money on Reliance, betting newer businesses such as telecommunications and retail could soon unlock value. With a goal of building a local e-commerce giant to challenge the likes of Amazon.com Inc. in India, Ambani has spent almost $50 billion -- mostly debt -- on a wireless carrier that’s become India’s No. 1 within three years of debut.

“Mukesh Ambani changed the narrative for Reliance Industries” as a leader not just in oil and gas but also in telecom and retail, and possibly soon in e-commerce as well, said Chakri Lokapriya, chief investment officer at TCG Asset Management, which oversees $3 billion in assets in Mumbai.

“He successfully identified, invested and executed rapidly to create this new narrative,” Lokapriya said. “We believe this can potentially double shareholder value over the next four years.”

The newer businesses are likely to contribute 50% of Reliance’s earnings in a few years, from about 32% now, Ambani said in August. A representative for Reliance didn’t reply to an email seeking comment on Ambani’s wealth.

Zero Net Debt

While the success of the phone operator was a cause for cheer, the business mogul’s plans to pare Reliance’s debt has sent Reliance’s stock soaring to a record.

Ambani, 62, has vowed to slash the group’s net debt to zero by early 2021. Plans include a stake sale in Reliance’s oil-to-chemicals business to Saudi Arabian Oil Co., listings of the telecommunications and retail units within five years, sale of tower assets and strategic partners for a digital platform linked to Reliance Jio Infocomm Ltd., the phone company.

The value of Reliance’s shares have almost tripled since the end of 2016, when Jio entered the Indian market with free calls and cheap data and forced some heavily indebted incumbents to exit or merge with rivals. With more than 350 million users, unlisted Jio reported a net income of 9.96 billion rupees ($140 million) for the September quarter while the other two private sector operators amassed record losses.

Still, investors have been wary of the ballooning debt at the group that spent about $76 billion in the last five years. Reliance Industries had a net debt of 1.54 trillion rupees at the end of March 31, Ambani told shareholders in August.

Aiding Reliance’s efforts to cut debt would be:

The proposed transaction with Aramco has run into a hurdle, threatening Ambani’s debt paring plans. An Indian court has sought details of Reliance’s assets after the Indian government petitioned to stop the proposed sale in an unrelated arbitration lawsuit.

Ambani, however, has a proven record in keeping his promises that investors are relying on.

“Ambani created value in Jio, which he deleveraged by hiving off his infrastructure assets to Brookfield,” said Sandeep Gupta, managing director, Protiviti India. “He can further deleverage the company from a debt point of view by bringing in strategic investors, which will raise the value further.”

As RIL shares rise, Ambani becomes 9th richest on Forbes' billionaires list

With a net worth of $60 billion, Reliance Industries chief Mukesh Ambani has been ranked the 9th richest person globally, according to 'The Real-Time Billionaires List' of Forbes, that was topped by Amazon Founder and CEO Jeff Bezos.

The list tracks the daily ups and downs of the world's richest people and reflects changes since 5 pm EST of the previous trading day. Ambani was ranked 13th in the annual Forbes' rich list for 2019.

Ambani made it to the daily list of top 10 richest people in the world following a significant jump in the share price of his flagship firm Reliance Industries on Thursday.

The company on Thursday became the first Indian firm to hit the Rs 10 trillion market valuation mark following a spike in its share price.

At market close, the oil-to-telecom conglomerate's market capitalisation (m-cap) zoomed to Rs 10,01,555.42 crore ($139.8 billion) on the BSE.

The stock rose 0.65 per cent to close at Rs 1,579.95. During the day, it jumped 0.90 per cent to an all-time high of Rs 1,584.

Bezos with a networth of $113 billion topped the The Real-Time Billionaires List of Forbes, followed by Microsoft co-founder Bill Gates ($107.4 billion) and Bernard Arnault & family Chairman and CEO, LVMH Moet Hennessy Louis Vuitton ($107.2 billion) in the second and third positions, respectively.

The wealth-tracking platform provides ongoing updates on the net worth and ranking of each individual confirmed by Forbes to be a billionaire.

Others in the top 10 include CEO of Berkshire Hathaway Warren Buffett with a net worth of $86.9 billion, Chief Executive Officer of Facebook Mark Zuckerberg ($74.9 billion), Amancio Ortega founder and former chairman of Inditex fashion group, best known for its chain of Zara clothing and accessories shops ($69.3 billion), Co-founder of software firm Oracle Larry Ellison ($69.2 billion), Carlos Slim Helu ($60.9 billion) and CEO of Alphabet Larry Page ($59.6 billion).

Mukesh Ambani in talks to sell news assets to Times Group: Report

Billionaire Mukesh Ambani is in talks to sell his news media assets to India’s Times Group, as Asia’s richest man plans to unload a business that’s been losing money, people familiar with the matter said.

Bennett Coleman & Co., the publisher of the Times of India, is looking to hire advisers for due diligence on the news properties of Ambani’s Network18 Media & Investments Ltd., the people said, asking not to be named as the discussions are private.

Ambani is considering various options, ranging from an outright exit to a stake sale, one of the people said.

Talks are at an early stage and may not result in a deal, the people said, adding more suitors may emerge. A representative for Bennett Coleman didn’t immediately respond to a request for comments, while a spokesman for Reliance Industries Ltd. said the parent of Network18 evaluates opportunities on an ongoing basis and declined to comment further.

The tycoon’s plan to dispose of his news assets comes as he pursues talks to sell a stake in Network18’s entertainment division that encompasses various movie, music and comedy channels to Sony Corp. Bloomberg News reported last week that the Japanese giant is currently examining the books of the Indian media company and is considering several potential deal structures. Network18 reported a group loss of 1.78 billion rupees ($25 million) in the year ended March, while its net debt stood at 28 billion rupees, according to the company.

Shares of Network18 jumped as much as 10 per cent on Thursday in Mumbai and were headed for their highest level in almost six months.

Ambani’s oil-to-petrochemicals conglomerate is in the midst of streamlining its operations and pivoting more toward relatively new ventures such as retail and technology for revenue. Last month, Reliance Industries unveiled a digital-services holding company that would eventually provide services from e-commerce to entertainment on a telecommunications network built over the last few years with about $50 billion in investment.

Network18, acquired by Reliance Industries in 2014, owns and operates 56 local channels spanning news and entertainment. News properties include MoneyControl, News18, CNBCTV18.com, CricketNext and Firstpost. Shares of its subsidiary TV18 Broadcast Ltd., which houses news channels, soared as much as 6.7 per cent in Mumbai.

Reliance Industries shares reached a record high on Thursday, giving the firm a market value of about $140 billion.

Unlisted Bennett Coleman, also known as the Times Group, owns television channels, including Times Now and ET Now.

JioFiber: Ambani bets on free TVs as he takes on Netflix, Amazon, telcos

Three years after elbowing into the Indian wireless phone market with free calls and data, billionaire Mukesh Ambani is back at it.

This time, Asia's richest man is handing out TVs to hook users on movies and entertainment shows via internet. The tycoon is wedging into a business teeming with players from rival mobile carriers to Netflix Inc and Amazon.com Inc.

Ambani's JioFiber broadband service, scheduled to start Thursday across India, comes with a high-definition television and set-top boxes at no charge for annual lifetime subscribers. The offer by Reliance Jio Infocomm Ltd, the tycoon's wireless powerhouse, includes subscriptions to most premium streaming services with prices starting from Rs 700 (about $10) a month.

The fiber-TV salvo comes days after Jio formally swept into the No. 1 spot for wireless services after free calls and cheap data lured hundreds of millions of subscribers and left rivals Bharti Airtel Ltd and Vodafone Idea Ltd struggling under mounting debt. Airtel, backed by tycoon Sunil Mittal, and billionaire Kumar Mangalam Birla's Idea are also trying to lure users by offering access to TV and movie content.

Telecom carriers around the world are adding entertainment content to their offerings as a way to compete for users and add revenue, especially in markets where the number of mobile subscriptions has reached saturation. In India, video-on-demand growth itself is explosive, according to researcher Boston Consulting Group.

The market could leap to $5 billion by 2023 from $500 million last year, BCG estimates. The boom has set Bollywood production houses, carriers and streaming services racing to feed demand for TV shows and movies and compete for users. Paying subscribers will probably rise to as many as 50 million, while users of advertising-supported video-on-demand will reach 600 million, BCG predicts.

To gain the upper hand in the streaming business against well-funded competitors like Netflix, Amazon.com and Walt Disney Co's Hotstar, Jio will need to go beyond just offering cheaper access via bundled services, said Shailesh Kapoor, founder and chief executive officer at Mumbai-based consultancy Ormax Media Pvt.

So far, the telecommunications company has relied on alliances with TV and film producers to provide content for its service bundles. JioFiber will also include movies that can be seen by subscribers on the same day they debut in cinemas, Ambani said in a speech laying out the plan on August 12. That part of the service won't start until the middle of next year, he said.

Own content

JioFiber, which Ambani said is being offered at "less than one-tenth the global rates," can also disrupt the streaming market if Jio produces its own content and signs up the best talent for that, Kapoor said.

Airtel, the brand name for Mittal's carrier, may take the most direct competitive hit from JioFiber because, along with content bundles for its mobile services, it is one of the country's largest TV service providers. The company's digital TV segment accounted for about 12% of earnings for the year ended March, data compiled by Bloomberg show.

In a possible attempt to get ahead of JioFiber's formal introduction, Airtel on Tuesday unveiled upgraded versions of its set-top box and the Airtel Xstream Stick, a USB device that allows an ordinary television to access OTT applications like Netflix, Amazon Prime Video and YouTube, along with Airtel's other content offerings.

Satellite providers such as Tata Sky Ltd and Dish TV India Ltd as well as cinema chains also face competition from Jio, which will offer fiber TV in bundles with its mobile services and free landline calling.

Shares of Dish TV fell 1% in early Mumbai trading Thursday, extending their decline to 12% since Ambani unveiled the plans. That compares with a 2.1% decline in the benchmark S&P BSE Sensex index. INOX Leisure Ltd, a movie-hall chain, has slid 11% in the period.

One deal at a time: How Mukesh Ambani is trying to take on Amazon in India

Mukesh Ambani is piecing together a strategy to take on Amazon.com Inc. in India.

Asia’s richest man is sharpening his focus on e-commerce with a string of tiny acquisitions and stake purchases to face the world’s largest online retailer, after shaking up India’s telecommunications industry with cheap data and free calls.

The acquisitions represent a new strategy for Ambani’s Reliance Group, whose founder -- his father Dhirubhai Ambani -- built a petrochemicals business and the world’s largest oil-refining complex from scratch. It’s a clear pivot toward consumer offerings in a country that’s becoming a battleground for giants such as Amazon.com and Walmart Inc.’s Flipkart Online Services Pvt.

“The deals may be tiny, but it’s more likely that they are putting together a team of talented people by acquisitions, who can then be invested in to build out larger platform products,” said Kunal Agrawal, an analyst with Bloomberg Intelligence.

Ambani is racing to grab a share of an online shopping market that Morgan Stanley estimates will grow to be valued at $200 billion by 2028 from about $30 billion last year. India will have 829 million smartphone users by 2022, according to Cisco Systems Inc., from a projected half a billion this year. That means a potential surge in demand for online services and products from music to food delivery, electronic gadgets and clothes.

‘Shopping Experience’

Ambani outlined his plan to shareholders in July, saying the effort will involve the group’s unlisted businesses Reliance Retail Ltd. and Reliance Jio Infocomm Ltd. He has already spent about $36 billion on Jio, which has rolled out a nationwide 4G network and fibre broadband infrastructure, causing some established rivals to pull back.

The platform will use augmented reality, holographs and virtual reality to create an “immersive shopping experience,” said Ambani, 61. Reliance’s consumer businesses will contribute nearly as much to the conglomerate’s overall earnings as its bread-and-butter energy businesses by the end of 2028, he said.

The service will seek to get on board the millions of mom-and-pop stores that dominate the Indian retail market, providing heft to its operations. Chains and large department stores account for only 10 per cent of the market.

The Reliance e-commerce platform would enable small merchants to “do everything that large enterprises and large e-commerce players are able to do,” Ambani said. A spokesman for Reliance Industries declined to comment on the progress of the plans.

The acquisitions will help bolster this network of partners. Last week, Reliance said it would spend 7 billion rupees ($101 million) to buy and fund the expansion of Haptik Infotech Pvt., a company that provides customer support chat services using artificial intelligence.

Radisys Corp. will help Reliance in enhancing its presence in the so-called Internet of Things and 5G in a bid to launch its broader e-commerce business, while Vakt Holdings will build a digital ecosystem leveraging block-chain technology. Grab a Grub will help Reliance deliver food, groceries and other merchandise using bikes as a delivery method in a hyper-local approach. Infibeam Avenues will help create e-commerce market places, Mint reported on its website.

Digital Ecosystem

The “acquisitions will help Reliance create a unique and a very powerful digital economy ecosystem for Reliance, which is way beyond simple merchandise e-commerce,” says Arvind K. Singhal, chairman and managing director of Technopak Advisors, a management consulting firm.

The combined value of the acquisitions doesn’t include a recently terminated 2017 deal by Jio to buy airwaves, towers and fiber assets for 173 billion rupees ($2.5 billion) from younger brother Anil Ambani’s Reliance Communications Ltd.

Ambani’s e-commerce plans have already won the support of investors. Shares of Reliance Industries Ltd. surged 48 percent in the past 12 months and touched a record high on April 1. The rally boosted Ambani’s net worth by $9.7 billion this year to $54 billion, according to the Bloomberg Billionaires Index.

While Ambani puts together the building blocks to take on Amazon and Walmart, the broader fight is already taking shape in India. In a move widely interpreted as extending a helping hand to home-grown business, the government imposed late last year restrictions on the global giants, requiring them to cut cash-back payments and discounts -- methods that have been criticized by smaller sellers who’ve accused the companies of predatory pricing.

To adjust to the rules, Amazon and Walmart have removed thousands of products from virtual shelves and must redraw contracts with merchants and brands as well as brace for a full-fledged e-commerce policy that is being reviewed.

Representatives for both Walmart and Amazon declined to comment.

As the battle lines are drawn, clues to how Reliance could use its might in its latest venture may be found in the way Ambani reshaped India’s telecommunications landscape with Jio over two years. That approach led many rivals to retreat, including brother Anil’s Reliance Communications.

“With its own telecom network, Reliance in India can go way beyond Amazon and Flipkart,” Technopak’s Singhal said. “The Reliance ecosystem - still in progress - for digital economy has multiple, very powerful components that include retail, entertainment, education and financial services.” is piecing together a strategy to take on Amazon.com Inc. in India.

Asia’s richest man is sharpening his focus on e-commerce with a string of tiny acquisitions and stake purchases to face the world’s largest online retailer, after shaking up India’s telecommunications industry with cheap data and free calls.

The acquisitions represent a new strategy for Ambani’s Reliance Group, whose founder -- his father Dhirubhai Ambani -- built a petrochemicals business and the world’s largest oil-refining complex from scratch. It’s a clear pivot toward consumer offerings in a country that’s becoming a battleground for giants such as Amazon.com and Walmart Inc.’s Flipkart Online Services Pvt.

“The deals may be tiny, but it’s more likely that they are putting together a team of talented people by acquisitions, who can then be invested in to build out larger platform products,” said Kunal Agrawal, an analyst with Bloomberg Intelligence.

Ambani is racing to grab a share of an online shopping market that Morgan Stanley estimates will grow to be valued at $200 billion by 2028 from about $30 billion last year. India will have 829 million smartphone users by 2022, according to Cisco Systems Inc., from a projected half a billion this year. That means a potential surge in demand for online services and products from music to food delivery, electronic gadgets and clothes.

‘Shopping Experience’

Ambani outlined his plan to shareholders in July, saying the effort will involve the group’s unlisted businesses Reliance Retail Ltd. and Reliance Jio Infocomm Ltd. He has already spent about $36 billion on Jio, which has rolled out a nationwide 4G network and fibre broadband infrastructure, causing some established rivals to pull back.

The platform will use augmented reality, holographs and virtual reality to create an “immersive shopping experience,” said Ambani, 61. Reliance’s consumer businesses will contribute nearly as much to the conglomerate’s overall earnings as its bread-and-butter energy businesses by the end of 2028, he said.

The service will seek to get on board the millions of mom-and-pop stores that dominate the Indian retail market, providing heft to its operations. Chains and large department stores account for only 10 per cent of the market.

The Reliance e-commerce platform would enable small merchants to “do everything that large enterprises and large e-commerce players are able to do,” Ambani said. A spokesman for Reliance Industries declined to comment on the progress of the plans.

The acquisitions will help bolster this network of partners. Last week, Reliance said it would spend 7 billion rupees ($101 million) to buy and fund the expansion of Haptik Infotech Pvt., a company that provides customer support chat services using artificial intelligence.

Radisys Corp. will help Reliance in enhancing its presence in the so-called Internet of Things and 5G in a bid to launch its broader e-commerce business, while Vakt Holdings will build a digital ecosystem leveraging block-chain technology. Grab a Grub will help Reliance deliver food, groceries and other merchandise using bikes as a delivery method in a hyper-local approach. Infibeam Avenues will help create e-commerce market places, Mint reported on its website.

Digital Ecosystem

The “acquisitions will help Reliance create a unique and a very powerful digital economy ecosystem for Reliance, which is way beyond simple merchandise e-commerce,” says Arvind K. Singhal, chairman and managing director of Technopak Advisors, a management consulting firm.

The combined value of the acquisitions doesn’t include a recently terminated 2017 deal by Jio to buy airwaves, towers and fiber assets for 173 billion rupees ($2.5 billion) from younger brother Anil Ambani’s Reliance Communications Ltd.

Ambani’s e-commerce plans have already won the support of investors. Shares of Reliance Industries Ltd. surged 48 percent in the past 12 months and touched a record high on April 1. The rally boosted Ambani’s net worth by $9.7 billion this year to $54 billion, according to the Bloomberg Billionaires Index.

While Ambani puts together the building blocks to take on Amazon and Walmart, the broader fight is already taking shape in India. In a move widely interpreted as extending a helping hand to home-grown business, the government imposed late last year restrictions on the global giants, requiring them to cut cash-back payments and discounts -- methods that have been criticized by smaller sellers who’ve accused the companies of predatory pricing.

To adjust to the rules, Amazon and Walmart have removed thousands of products from virtual shelves and must redraw contracts with merchants and brands as well as brace for a full-fledged e-commerce policy that is being reviewed.

Representatives for both Walmart and Amazon declined to comment.

As the battle lines are drawn, clues to how Reliance could use its might in its latest venture may be found in the way Ambani reshaped India’s telecommunications landscape with Jio over two years. That approach led many rivals to retreat, including brother Anil’s Reliance Communications.

“With its own telecom network, Reliance in India can go way beyond Amazon and Flipkart,” Technopak’s Singhal said. “The Reliance ecosystem - still in progress - for digital economy has multiple, very powerful components that include retail, entertainment, education and financial services.”