Reliance’ Big Electronics Manufacturing Push: Invests Rs 1650 Crore In This Company For Making 5G Hardware & More

Reliance Industries announced that it would invest 16.7 billion rupees ($220.70 million) to create a joint venture (JV) with the U.S.-listed Sanmina Corp for making electronic products in the Asian countries, on Thursday.

Reliance Sanmina Joint Venture

In a regulatory filing, Reliance said that the JV plans to make hardware for 5G communications, cloud infrastructure, healthcare systems, clean technology, and defense and aerospace.

This seems to be a positive step as India pushes for more investment in the manufacturing sector in a bid to establish the country as a global electronics production hub. 

To achieve this, the country has offered nearly $30 billion in incentives to woo electronics manufacturers to set up shop in India.

In this deal, Billionaire Mukesh Ambani’s Reliance will hold a 50.1% stake in the JV after the investment in Sanmina’s existing Indian entity through a Reliance unit. 

As per the plan, Sanmina will contribute its existing contract manufacturing business to the JV.

Sanmina Chief Executive Officer Jure Sola said that the JV will service both domestic and export markets, in a statement.

Future Expansion Plans

Initially, all the manufacturing will take place at Sanmina’s campus in the south Indian city of Chennai.

Later on they plan for expansion in other manufacturing sites within the country.

By the end of the fiscal year March 31, 2021, Sanmina’s Indian entity,  Sanmina SCI India Private Ltd has raked in revenue of about 12.3 billion rupees.

This deal looks promising as it is expected to scale up its existing footprint in India .

Coming to Reliance, it has in recent years diversified away from its mainstay oil business as it has built its presence in the retail and telecom industries. 

The Indian conglomerate unveiled an aggressive plan to foray into green energy last year.

With the announcement of this deal, Reliance shares rose as much as 0.7% on Thursday’s session, before paring gains to trade marginally lower by 0416 GMT.

Take Over Of Future Group

In another development, India’s second-largest retailer Future Retail Limited or FRL has suspended most of its online and offline operations after Reliance took over at least 200 of its stores due to missed lease payments.

It plans to rebrand the stores since FRL could not pay for them, thereby closing most outlets of the popular Big Bazaar chain.

Now, it is all set to reopen these stores next week as it is going to take over the flagship supermarkets of Future.