Jio Financial Services seeks shareholder nod for its unit to buy telecom gear worth Rs 36,000 crore from Reliance Retail, marking its debut in device leasing. JFS’s subsidiary, Jio Leasing Services, will purchase routers and mobile phones for leasing to Reliance Jio Infocomm clients. The voting closes on June 22, with the deal expected to conclude in fiscal years 2025 and 2026.
Jio Financial Services (JFS) aims for shareholder consent for its subsidiary to purchase 360 billion rupees ($4.33 billion) worth of equipment from Reliance Industries’ retail segment, signaling its foray into device leasing, as per a postal ballot notice.
Venturing into Device Leasing: Jio Financial’s Partnership with Reliance Retail
The proposed agreement entails the purchase of telecom equipment and devices, such as routers and cell phones, by the JFS unit named Jio Leasing Services. Subsequently, the subsidiary will lease out the acquired equipment to Reliance Jio Infocomm customers, as stated by the financial services firm.
Jio Financial, established as a separate entity from Mukesh Ambani’s Reliance Group last year, announced during its earnings investor presentation that it would offer Jio Infocomm’s AirFiber wifi services, phones, laptops, and other items for lease. The company will enter the device-rental sector, facing competition from industry giants such as Hewlett Packard and Lenovo. The voting for the proposed items in the notice concludes on June 22, with the deal anticipated to proceed thereafter.
Mukesh Ambani’s Jio Financial Services (JFS) intends to request shareholder consent for its leasing arm to purchase telecom equipment and devices valued at Rs 36,000 crore ($4.33 billion) from Reliance Industries’ retail division – Reliance Retail Ltd. Jio Leasing Services Limited (JLSL), a wholly-owned subsidiary of JFS, aims to venture into the device leasing sector, with the equipment slated for use in broadband wireless connectivity and related services.
“JLSL is venturing into the realm of operating lease through a Device-as-a-Service (DaaS) framework, which entails leasing goods accompanied by relevant services instead of outright purchases,” stated a postal ballot notice to JFS shareholders.
Reliance Retail, a subsidiary of Reliance Industries Ltd, is primarily engaged in dealing with devices and related equipment. JLSL will procure customer premises equipment/devices and telecom gear from Reliance Retail Ltd (RRL), as per the postal ballot notice. JLSL will then offer these devices and telecom equipment on an operating lease to Reliance Jio Infocomm Ltd’s customers. These transactions will involve cost plus margin and are envisioned as ongoing business dealings.
The company is seeking approval from shareholders for transactions over two financial years, FY25 and FY26, estimated at Rs 36,000 crore. The distribution of purchases between the two years will be based on service demand and broadband device deployment pace, as per the shareholder notice. Listed firms must obtain shareholder consent for related-party transactions exceeding Rs 1,000 crore or 10% of annual consolidated turnover. The company’s audited consolidated turnover was Rs 41.63 crore for FY23 and Rs 1,853.88 crore for FY24.
According to the notice, RRL deals in customer premises equipment, enterprise devices, and telecom devices, procured at competitive prices due to large volumes, and will supply them to JLSL at cost plus margin. Jio FS operates in lending and leasing, payments, protection, and investments. In lending and leasing, it offers vendor financing and plans to expand into home loans, loans against property, and mutual fund loans. In the leasing segment, it aims for a new service model under DaaS, targeting AirFiber, phones, laptops, solar panels, and EV batteries, among others, as per an investor presentation.
Renting out purchased equipment to Reliance Jio Infocomm customers.
Seeking shareholders’ approval for transactions in FY25 and FY26.
Competing with Hewlett Packard and Lenovo in device rentals.
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