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by blueblisters
2153 days ago
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Ben later cited two articles written by people who are arguably closer in geographical proximity to Jio: - https://hind.substack.com/p/reliance-origins/ - https://hind.substack.com/p/from-oil-to-jio The articles say that the Ambani family was very close to the Gandhis too. It's very hard to find a complete picture of how Reliance works - I guess they keep a very tight inner circle. Most accusations of impropriety are very vague. I don't think anyone disagrees that Reliance has tremendous political influence, but it's hard to argue that influence is greater than other Indian oligarchs (Mittals, Tatas, Birlas etc.). It's especially hard to curry favor at the expense of the other. I think the biggest reason for Reliance's relative success in cornering the telecom market is that their oil exports cashflow allows them to borrow money at much lower rates than their competitors, without worrying about hedging costs. The recent spate of investments have almost certainly been accelerated due to the drop in oil prices which has hurt their long-term debt settlement prospects tremendously. The investments gave a much needed sigh of relief for the Reliance group of companies and their bondholders. |
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That's naive at best.
It's no secret that Billionaires have their way anywhere in the world, especially in India where inequality is enforced, armored with the caste system. So, an Entrepreneur belonging to high caste, heading a company (Infosys, TCS etc.) has far less hurdles than a lower caste individual whose even the right to education via the reservation system would be questioned at every step of their life.
That said, Reliance - BJP nexus is nothing like India has seen before, so the political favors received by the Mittals, Tatas, Birlas pale in comparison. Details in other comment replies.
>The investments gave a much needed sigh of relief for the Reliance group of companies and their bondholders.
It was not like Jio was struggling for survival, which loads of other companies and millions of Indians do at this pandemic. Govt.'s answer to them? Get a loan from the Bank(Which none of the Banks are willing to give, even farmer gold loans have been halted in several states).
Where else have we seen global competitors who are fighting neck and neck in different markets invest in a single company which hasn't proven anything else other than undercutting competitors with inferior technology? Only thing which makes Reliance-Jio different from any other companies in India are its political influence and that is why these global players are rushing to invest. That and the wretched data.