Reliance Industries enters into manufacturing Joint Venture with Sanmina; stock marginally up

3 Mar 2022 , 10:33 AM

Reliance Industries Limited through its wholly-owned subsidiary Reliance Strategic Business Ventures Limited (RSBVL), has entered into an agreement with Sanmina Corporation, a leading integrated manufacturing solutions company to create a joint venture through an investment in Sanmina’s existing Indian entity. This partnership will combine Sambina’s 40 years of experience in advanced manufacturing and Reliance’s expertise and leadership in the Indian business ecosystem. Samina’s existing management team in Chennai will continue to manage the day-to-day business operations of the company.

This joint venture strives to create a world-class electronic manufacturing hub in India, sharing same vision of “Make in India” as the Hon’ble Prime Minister.

The joint venture aims to prioritize high technology infrastructure hardware, for growth markets, and across industries such as medical and healthcare systems, industrial and cleantech, communications networking (5G, cloud infrastructure, hyperscale datacenters), and defence and aerospace. The joint venture will create a state-of-the-art ‘Manufacturing Technology Center of Excellence’ along with supporting Sanmina’s current customer base. This center of excellence 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.

RSBVL will hold a majority 50.1% equity stake in the joint venture entity with Sanmina owning the remaining 49.9%. Initially, RSBVL will infuse an investment of upto Rs1,670 crore in new shares in Sanmina’s existing Indian entity while Shamina will be putting ahead 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.

RIL is currently trading at Rs2,404.50 up by Rs6.1 or 0.25% from its previous closing of Rs2,398.40 on the BSE. The scrip opened at Rs2,411 and has touched day’s high and low of Rs2,414.45 and Rs2,391.75 respectively.