Good Day @scr
Firstly in the investing realm it’s all about the probabilities and uncertainty of the future that everyone invest with some level of mental model.
Do I have a concrete evidence in proving this? NO
Even the company doesn’t share their strategy or cost of funds that easily before starting a business.
So my thesis are
Firstly JIO comes from the reputed management none other than Ambani.
Secondly JIO is headed by the market veteran KV Kamath
Third : JIOs stake in Reliance
Fourth : Major Source of funds for JIO would be none other than the mother company reliance
Fifth : Reputation matters when it comes to HNI, UHNI, corporates to invest in an NBFC for so which we have, secondly we have top notch management, third we have reliance as a parent to take care of all the needs during crisis
Sixth : Reliance doesn’t need a introduction to the market, they already have they have name, brand and reach to every corner of the country that becomes very easy for them market and push this forward
Seventh : Cross selling in reliance digital, trends, much more
Eight : They have all man power needed and they are already established so that cuts most of the hurdle.
Ninth : Coming to capital they can raise capital either issuing NCD or get money from the parent company or they can reach to N number of investor for the capital. So capital is not a big task here, the biggest bet would be management on utilisation of it.
I don’t know if this answer suffice your needs but I don’t think Reliance has any problems with capital.
One thing is for sure that Ambani’s are good at :
If you know that tou have a product and no one is buying them : then you make loss and also you loose in terms of market share.
However if you sell your product at reasonably cheap value and if you still make loss that’s okay for them but the main point is did you capture the market share?
Same principle DMart runs low product tiny margin
JIO sim was one more example with free of services over a year followed by exuberant price hikes thus choking other players to also raise their prices.
At end everyone walks to DMart for low prices and everyone needs JIO for low prices…!!
Cheers
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