The investments are expected to help RIL reduce its debt and expand its digital offerings
23 May, 2020, 11:25
With this deal, KKR becomes the fifth American investor in Jio, which so far has raised Rs 78,562 crore ($10.3 billion) from external parties.
Of the ₹43,574 crore that it will receive from Facebook, Jio plans to use ₹28,000 crore to redeem optionally convertible preference shares (OCPS) of its parent RIL and retain ₹15,000 crore in its books, Jio's top management had said in a conference call on 22 April.
The latest transaction values Jio Platforms at an equity value of ₹4.91 lakh crore and an enterprise value of ₹5.16 lakh crore. Total investment of the five deals announced so far is Rs 78,562 crore for a 17.12 per cent stake.
On 8 May, US-based Vista Equity Partners bought 2.32 percent stake in Jio Platforms for Rs 11,367 crore and on May 17 global equity firm General Atlantic picked up 1.34 percent stake for Rs 6,598.38 crore. It includes Reliance Jio, India's biggest mobile network with more than 388 million subscribers.
Jio Platforms is an umbrella company that manages Reliance's digital services like Reliance Jio, Jio Fiber, MyJio, JioTV, JioCinema, Jio Mart JioNews and JioSaavn under one banner.
Since inception, the firm has invested over Dollars 30 billion (total enterprise value) in tech companies, and its technology portfolio now has more than 20 companies across the technology, media and telecom sectors.
KKR To Invest $1.5B In India's Jio Platforms, Joins Facebook, Three Other US Firms As Stakeholders
The fund has also put money into technology-driven companies like enterprise solutions provider BMC Software Inc., ByteDance Ltd., owner of the TikTok social video platform, and Indonesia-based ride-hailing and food-delivery giant GoJek.
In addition, India has been a key strategic market for KKR with a history of investing in the country since 2006.
Meanwhile, Henry Kravis, cofounder and co-CEO of KKR, added, "Few companies have the potential to transform a country's digital ecosystem in the way that Jio Platforms is doing in India, and potentially worldwide". The private equity fund will pay 113.7 billion rupees for a 2.3% stake in Jio.
All the transactions are now underway and subject to regulatory and other approvals.
Reliance Jio and its investments in India, particularly in the telecom space, have changed the very dynamics of the industry.
Jio Platforms has made significant investments across its digital ecosystem, powered by leading technologies spanning broadband connectivity, smart devices, cloud and edge computing, big data analytics, artificial intelligence, Internet of Things, augmented and mixed reality and blockchain.