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A unit of Reliance Industries, controlled by tycoon Mukesh Ambani, said it will invest up to 16.7 billion rupees ($220 million) to team up with U.S.-listed Sanmina to build an electronics manufacturing hub in India.
The investment will be made by Reliance Strategic Business Ventures, according to a joint statement from Reliance and Sanmina, an electronics manufacturer, on Thursday.
Reliance will have a 50.1% stake in the joint venture through an investment in Sanmina’s India unit, Sanmina SCI India. Sanmina will own the remaining shares. The completion of the deal is subject to customary closing conditions, including regulatory approvals, and is expected to close no later than September 2022.
Akash Ambani, director of Reliance Industries’ tech unit Reliance Jio, said the joint venture will provide access to the significant opportunity for high-tech manufacturing as India aims to be more self-reliant in electronics manufacturing in telecom, IT, data centers, cloud, 5G, new energy and other industries.
“Through this partnership we plan to boost innovation and talent in India, meeting both Indian and global demand,” Akash Ambani said.
Sanmina SCI India had revenue of 12.3 billion rupees ($161 million) for the fiscal year ended March 31, 2021. The company’s operations will be based at Sanmina’s 100-acre campus in Chennai, which can be expanded.
“We are excited to partner with Reliance to build the premier integrated manufacturing solutions company in India,” Jure Sola, chairman, and chief executive officer of Sanmina, said.
The Indian digital economy is growing at 50% per year and is projected to reach $1 trillion thanks to increasing internet penetration and digital content consumption, according to management consultant firm Redseer.
Mukesh Ambani held the top position in the Forbes’ October 2021 list of India’s 50 Richest people, with a net worth of $92.7 billion. Ambani is upbeat on the future of the digital economy, and Reliance Jio recently has invested in the metaverse by acquiring a stake in Two Platforms, a Silicon Valley-based deep tech startup. (Disclosure: Reliance Industries owns Network18, which publishes Forbes India.)