18 May General Atlantic to invest Rs 6,598.38 crore in Jio Platforms
Mumbai: Private equity firm General Atlantic is set to invest ₹6,598.38 crore in Jio Platforms for a 1.34% stake. This will be the fourth investment in the Reliance Industries Ltd (RIL) business in rapid succession, following those by social media major Facebook and private equity funds Silver Lake and Vista Equity Partners. Analysts expect more such deals to take place.
“This investment values Jio Platforms at an equity value of ₹4.91 lakh crore and an enterprise value of ₹5.16 lakh crore. General Atlantic’s investment will translate into a 1.34% equity stake in Jio Platforms on a fully diluted basis,” RIL said in a release on Sunday.
With the latest deal, Jio Platforms will get a combined ₹67,194.75 crore from the four investments. The RIL unit comprises mostly its telecom business under Reliance Jio Infocomm, which is the largest in the country with more than 388 million subscribers. RIL’s other digital properties and investments such as Jio Cinema, Jio Saavn and Haaptik are housed in Jio Platforms.
The transaction is subject to regulatory and other customary approvals, the company said.
PE Fund’s Largest Deal in Asia
Analysts expect RIL to dilute another 7-8% in Jio Platforms and add that these deals will help reposition the oils-to-retail-telecom conglomerate as a consumer-technology company.
“So far, 14.8% stake has been sold and there could be more in the pipeline, in which RIL will bring down its stake further in Jio to move toward a zero-debt company,” said an analyst.
Vista Equity Partners said on May 8 it will be picking up a 2.32% stake for ₹11,367 crore. Prior to that, US private equity firm Silver Lake said it will invest ₹5,655.75 crore in Jio Platforms for a 1.15% stake and on April 22, Facebook said it would invest $5.7 billion for a 9.99% stake.
“I have known General Atlantic for several decades and greatly admired it for its belief in India’s huge growth potential,” RIL chairman Mukesh Ambani said in the statement. “General Atlantic shares our vision of a digital society for India and strongly believes in the transformative power of digitisation in enriching the lives of 1.3 billion Indians. We are excited to leverage General Atlantic’s proven global expertise and strategic insights across 40 years of technology investing for the benefit of Jio.”
The global PE firm had about $34 billion in assets under management as of March 31 and the deal with Jio is its largest in Asia till date. Some of the companies it has backed include Airbnb, Alibaba, Ant Financial, Box, ByteDance, Facebook, Slack, Snapchat and Uber.
In India, the PE firm’s major investments include Byju’s, PNB Housing Finance, Mu Sigma and IIFL Wealth Management.
“As long-term backers of global technology leaders and visionary entrepreneurs, we could not be more excited about investing in Jio,” said Bill Ford, chief executive officer of General Atlantic, in the statement. “We share Mukesh’s conviction that digital connectivity has the potential to significantly accelerate the Indian economy and drive growth across the country.”
RIL reiterated that it has made 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.