Reliance Strategic Business Ventures Limited (RSBVL), a wholly-owned subsidiary of Reliance Industries Limited (RIL), has entered into an agreement with Sanmina Corporation to create a joint venture to create a world-class electronic manufacturing hub in India.
RSBVL will hold 50.1% equity stake in the joint venture entity with Sanmina owning the remaining 49.9%, RIL said in a regulatory filing on March 3. “RSBVL will achieve this ownership primarily through an investment of upto Rs 1,670 crore in new shares in Sanmina’s existing Indian entity, while Sanmina will contribute its existing contract manufacturing business. As a result of the investment, the joint venture will be capitalized with over $200 million of cash to fund growth.”
Completion of the transaction is subject to customary closing conditions, including regulatory approvals, RIL said adding that, the transaction is expected to close no later than September 2022.
Akash Ambani, Director, Reliance Jio, said, “We are delighted to work with Sanmina to access the significant market opportunity for high-tech manufacturing in India. For both growth and security, it is essential for India to be more self-reliant in electronics manufacturing in Telecom, IT, Data Centers, Cloud, 5G, New Energy and other industries as we chart our path in the new digital economy. Through this partnership we plan to boost innovation and talent in India, meeting both Indian and global demand.”
The joint venture will prioritize high technology infrastructure hardware, for growth markets, and across industries such as communications networking (5G, cloud infrastructure, hyperscale datacenters), medical and healthcare systems, industrial and cleantech, and defense and aerospace, the oil-to-telecom conglomerate said in the filing.
In addition to supporting Sanmina’s current customer base, the joint venture will create a state-of-the-art ‘Manufacturing Technology Center of Excellence’ that will serve as an incubation center to support the product development and hardware start-up ecosystem in India, as well as promote research and innovation of leading-edge technologies, the official statement added.
Following the announcement, the RIL shares advanced 0.32 percent to Rs 2406 apiece on the BSE, while the benchmark Sensex was up 353.52 points or 0.64 percent at 55,822.42.Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.