In what is probably the company’s most fanciful investment to date, India’s largest private sector company Reliance Industries has taken a controlling stake in a US-based futuristic transportation company.
skyTran Inc is developing a technology to transport people using pods that are kept in the air by a magnetic force from below.
RIL, which was a minority stakeholder in the company, said it invested another $26.76 million (around Rs 200 cr) to take a majority stake of 54.46%.
This is by far the most fanciful investment by the hydrocarbons to telecom giant.
The company, which started as a polyester yarn maker more than fourty years ago, is present in oil and gas, retail and telecom.
However, the company has almost zero presence in transportation.
RIL said skyTran is aiming to revolutionize urban transportation by leveraging technology, such as Internet-of-Things and analytics, areas that RIL’s digital arm is focused on.
“skyTran has developed breakthrough passive magnetic levitation & propulsion technology for implementing personal transportation systems aimed at solving the problem of traffic congestion globally. The technology has been developed by skyTran to create Smart Mobility Solutions.
“The proposed skyTran transportation systems would consist of computer-controlled passenger pods running on its state-of-the-art, patented Passive Magnetic Levitation technology and would use cutting edge IT, Telecom, loT and Advanced Materials technologies to transport passengers in a fast, safe, green, and economical manner. It is also supported by notable global venture capital investors such as Innovation Endeavors,” the Indian company said.
skyTran is a technology company incorporated under the laws of Delaware, United States of America (USA) in 2011.
Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said the acquisition reflected his company’s commitment to invest in futuristic technologies that have the potential to transform the world.
“We are excited by skyTran’s potential to achieve an order of magnitude impact on highspeed intra and inter-city connectivity and its ability to provide a high speed, highly efficient and economical ‘Transportation-As-A-Service’ platform for India and the Rest of the World.
“We firmly believe that non-polluting high speed personal rapid transportation system will help facilitate environmental sustainability through efficient use of alternative energy and make an impactful reduction in air and noise pollution.”
Transportation in India is largely in the hands of public sector enterprises such as Indian Railways.
While Mukesh Ambani’s brother Anil had forayed into this sector by operating a couple of metro services in Delhi and Mumbai, he could not expand that business in recent years because of financial difficulties.
Virtually no other big business house focuses on large-scale/mass transportation systems.
Larsen & Toubro, meanwhile, has expertise in constructing metro rail services, while the Tata Group is one of Indias’ largest automobile manufacturers.
Nevertheless, mass transportation is a virgin and untapped area as far as private sector enterprises are concerned.
India is home to the world’s most thickly populated cities, such as Mumbai, as well as its most overstretched transportation systems.
Magnetic levitation-based technologies are expected to play a big role in the transportation of the future, and are already in use in China.
The Shanghai maglev train or Shanghai Transrapid of China is the oldest commercial magnetic levitation system in operation and travels at 431 km/h, or about half the speed of a passenger jet.
Another similar, but non-identical system is called hyperloop. Instead of magnetic force, hyperloops depend on vaccumized tubes and are more suitable for long-distance travel.
RIL is India’s largest private sector company, with a consolidated turnover of INR 659,205 crore ($87.1 billion), cash profit of INR 71,446 crore ($9.4 billion), and net profit of INR 39,880 crore ($5.3 billion).
