On June 5, Reliance Jio, the telecom unit of Reliance Industries, announced that US based private growth equity firm Silver Lake has once again strike a deal of Rs 4,546.8 crore taking around 2.08% of stake making 7 deals in 6 weeks. While Mubadla an Abu Dhabi based investment company also invested around Rs 9,093.6 crore on June 4. With these investments, Jio has raised Rs 92,202.15 crore ($8 billion) selling around 19.8% of their stake from leading technology investors like Facebook, Silver Lake, Vista Equity Partners, General Atlantic and Mubadla in 6 weeks.
This was the seventh investment on Reliance Jio platforms since Facebook’s investment on April 22, when Facebook Inc. bought a 9.99% stake in Jio Platforms valued at $5.7 billion(Rs 43,574 crore). Then, on May 4, US based private equity firm Silver Lake first invested around $746.74 million(Rs 5,656 crore) and then later investing around Rs 4546.8 crore again on June 5. On May 8, United States-based private equity firm, Vista Equity Partners Limited, invested Rs 11,367 crore in Jio Platforms and again on 22 March a private equity firm KKR also invested around Rs 11367 crore. While on May 17 General Atlantic invested around ₹ 6,598.38 Crore. Lately, just before the second investment by Silver Lake, Mubadla, a Abu Dhabi based investing company, invested around Rs 9,093.60 crore for a stake of 1.85% in Reliance Jio.
Jio Platforms is a next-generation technology platform focused on providing high-quality and affordable digital services across India. Jio Platforms has made significant investments across its digital ecosystem which is powered by leading technologies like broadband connectivity, smart devices, cloud and edge computing, big data analytics, artificial intelligence, Internet of Things(IoT), augmented and mixed reality, and block chain.
Jio’s vision is to enable a Digital India for 1.3 billion people and businesses across the country, including small merchants, micro-businesses and farmers so that all of them can enjoy the inclusive growth together. With these investments, Ambani plans to drive Jio ahead in the competition with giants like Amazon.com Inc. and Walmart Inc., both of which have investments in India, the world’s biggest open consumer market.
Companies which have Invested in Jio
The social media giant Facebook had announced on April 22 its plans to invest $5.7 billion which is Indian Rs 43,574 crore for 9.99% stake in Reliance Industries Limited’s(RIL) telecom business, Reliance Jio. By partnering with Jio, Facebook plans to take advantage of its popular WhatsApp messenger to offer digital payment services to small grocers in India.
With a 9.9 percent stake in Reliance Jio, Facebook gets a firm foothold in a fast-growing market of India. Also, it helps Reliance Jio to significantly cut down its debt. The deal valued Jio at Rs 4.62 lakh crore ($65.95 billion). It was Facebook’s biggest deal since the $22 billion buyout of WhatsApp in 2014.
Three days later, Reliance Retail signed a commercial agreement with Facebook's WhatsApp to further the reach of its online venture JioMart as JioMart went live on WhatsApp on April 26. JioMart began offering its services in suburban Mumbai areas like Navi Mumbai, Thane, and Kalyan. These services will be extended all over the country.
This deal is expected to show the capacity for scaling due to a heavy user base comprising 400 million WhatsApp users and Jio’s 388 million subscribers. JioMart uses WhatsApp to bring in high-speed information and digital cash. JioMart and Whatsapp will empower nearly 3 crore small Indian Kirana shops to digitally transact and take on giants such as Amazon India.
Silver Lake Partners
Jio-Silver Lake deal came less than two weeks after the Facebook deal. On May 4, Silver Lake Partners, an American private equity giant, bought 1% stake in Jio Platforms for Rs 5,655.75 crore($750 million). This deal took Jio's enterprise value to Rs 5.15 lakh crore and represents a 12.5% premium to the equity valuation of Facebook's investment and again hitting the investing road with Jio, they invested around Rs 4,546.8 crore taking around 2.08% of the company stake. Now the aggregate investment by this firm is around Rs 10,202.55 crore.
Reliance Industries Limited’s Chairman, Mukesh Ambani said during the first investment, "Silver Lake Partners has an outstanding record of being a valuable partner for leading technology companies globally. We are excited to leverage insights from their global technology relationships for the Indian digital society's transformation."
These deals will help Reliance use Facebook's tech in its new businesses. It will give the US tech giant's India reach a massive boost through a partner in Ambani who is widely perceived to be influential in government circles. Silver Lake's investment highlights Reliance's ability to monetize its digital services business and strengthens Reliance’s already strong financial flexibility.
Silver Lake Partners (SLP) was launched in 1999 as a specialist firm to focus on technology company investments. SLP engages as a strategic market participant via large-scale investments in technology and technology-enabled and related growth businesses. SLP made headlines after acquiring PC maker Dell Inc in conjunction with Michael Dell in 2013.
Its portfolio of investments collectively generates revenues of more than $204 billion annually. Its portfolio includes Twitter, AirBnb, Alibaba Group, Ant Financial , Didi Chuxing , Motorola Solutions and City Football Group. It sold Skype to Microsoft for $8.5 bn in 2011, touted as one of the most successful private equity exits in history.
Vista Equity Partners
Following this, on May 8, Vista Equity Partners, a US-based private equity firm running the world’s largest exclusively tech-focused fund, bought a 2.32 % stake in Jio Platforms for Rs. 11,367 crore. The deal made it the third high-profile investment in the Reliance Industries Ltd' (RIL) unit and highlights Jio's status as a next-generation software and platform company.
This deal valued Jio Platforms at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore. Vista’s investment is at a 12.5% premium over the deal with Facebook. It will be Vista’s biggest investment outside of its home country and its first in Asia. With this deal, Jio has become the fourth most valued entity in India after HDFC Bank, TCS, and RIL.
RIL chairman Mukesh Ambani stated,
“In Robert and Brian, whose family hails from Gujarat, I found two outstanding global technology leaders who believe in India and the transformative potential of a digital Indian society. We are excited to leverage the professional expertise and multi-level support that Vista has been offering to its investments globally for the benefit of Jio.”
The investment from Vista will be used by Jio to buy back RIL’s optionally convertible preference shares. The Vista deal will further help in fixing the equity value of Jio and improve RIL’s cash flows. This will accelerate RIL’s deleveraging exercise as RIL plans to eliminate Rs 1.75 lakh crore of net debt by the end of this financial year.
In 2000, Vista was founded by Robert Smith and Brian Sheth. Though Jio will be Vista’s maiden investment in India, its portfolio companies have a significant presence in the country with over 13,000 employees. Through Jio, Vista hope to earn good returns as and when the telecom and technology company goes public, which is part of Ambani’s plan.
Vista chairman Robert Smith, a.k.a the richest black American, said,
“Mukesh’s vision as a global pioneer, alongside Jio’s world-class leadership team, have built a platform to scale and advance the data revolution it started. We are thrilled to join Jio Platforms to deliver exponential growth in connectivity across India, providing modern consumer, small business and enterprise software to fuel the future of one of the world’s fastest growing digital economies.”
Billionaire Mukesh Ambani extended his fund-raising streak for Jio Platforms Ltd. by selling 1.34% equity stake to General Atlantic on May 17. Reliance Industries Limited and Jio Platforms Limited announced an investment of ₹ 6,598.38 crore($873 Mn) stake by General Atlantic, a leading global growth equity firm that has invested in Airbnb Inc. and Uber Technologies Inc. earlier.
Reliance Industries Chairperson, Mukesh Ambani said,
“I am thrilled to welcome General Atlantic, a marquee global investor, as a valued partner. I have known General Atlantic for several decades and greatly admired it for its belief in India’s huge growth potential. General Atlantic shares our vision of a Digital Society for India and strongly believes in the transformative power of digitization in enriching the lives of 1.3 billion Indians.”
This investment values Jio Platforms at an equity value of ₹ 4.91 lakh crore and an enterprise value of ₹ 5.16 lakh crore. The deal will consolidate backing for Jio’s plan to use its almost 400 million mobile phone subscribers as a base for an e-commerce drive to use India’s vast consumer markets—from retail to education and payments. The deal will also support Ambani’s vow to pay down more than $20 billion of net debt at Reliance earlier than an initial March 2021 deadline.
Akash Ambani, director of Reliance Jio and Mukesh Ambani’s son, stated,
“We are delighted that a renowned global investor like General Atlantic is partnering with us in our journey to digitally empower India and Indians. Jio is committed to make a digitally inclusive India that will provide immense opportunities to every Indian citizen.”
General Atlantic is a leading global growth equity firm with a 40-year track record of investing in the Technology, Consumer, Financial Services and Healthcare sectors. It operates across 14 locations as an integrated team under a global investment platform. General Atlantic invests in firms known for innovation and entrepreneurship and supported by long-term secular growth.
Till date, General Atlantic has invested in prominent entrepreneurs and companies around the world such as Airbnb, Alibaba, Ant Financial, Box, ByteDance, Facebook, Slack, Snapchat, Uber, and other global technology leaders.
KKR an American private equity firm has also been one of the key investor by buying around Rs 11367 cr around 2.32% of stake.
Reliance Industries Limited chairman Mukesh Ambani stated, “We are looking forward to leveraging KKR’s global platform, industry knowledge and operational expertise to further grow Jio.”
Whereas KKR chairman Henry Kravis said “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,”
KKR was founded in 1976 by Henry Kravis and George Roberts and since then has been a prime equity firm of US market.
Mubadala Investment Company
Striking a deal of Rs 9093.6 crore with the Abu Dhabi based investment company will surely help Reliance Jio to expand their reach towards the gulf countries. It will help them expand their venture globally. While so many US based firms investing and now Abu Dhabi based firm also becoming an important investor.
Mubadla Investment Company founded in 2017 in Abu Dhabi, UAE has been one of the key investing company which has helped in growing up UAE economy at a global front. Investments like these can play a key role in developing Jio hold all around the world.