KKR to invest in Jio Platforms, 5th deal for Reliance Industries in less than a month

Reliance Jio KKR

Reliance Industries Limited (RIL) has announced private equity firm, KKR will be investing Rs. 11,367 crore in Jio Platforms for 2.32% stake. RIL will have the 5th investment through KKR. In succession, following those by social media giants Facebook, private equity funds Silver Lake, Vista Equity Partners and General Atlantic

RIL said during a release “This transaction values Jio Platforms at an equity value of Rs. 4.91 lakh crore and an enterprise value of Rs. 5.16 lakh crore. This is KKR’s largest investment in Asia and will translate into a 2.32% equity stake in Jio Platforms on a fully diluted basis.”

The recent deal will give Jio Platforms a combined Rs. 78,562 crores from the five investments. The RIL unit comprises mostly of its Telecom business under Reliance Jio Infocomm which is the largest in the country with quite 388 million subscribers.

“KKR shares our ambitious goal of building a premier Digital Society in India. KKR has a proven track record of being a valuable partner to industry-leading franchises and has been committed to India for many years. We are looking forward to leveraging KKR’s global platform, industry knowledge and operational expertise to further grow Jio.” said Chairman and Managing Director Mukesh Ambani in a statement on Friday.  The company said, ‘the transaction is subject to regulatory and other customer approvals.’

Prior to this, General Atlantic on May 18 said that it would buy 1.34% stake in Jio Platforms for rupees 6,598.38 crore, while Vista Equity Partners said on May 8 that it would be picking up a 2.32% stake for Rs. 11,367 crore.

Prior to that, US private equity firm Silver Lake said that it would invest Rs. 5,655.75 crore in Jio Platforms for 1.15% stake and on April 22, Facebook said that it would invest USD 5.7 billion for 9.99% stake.

To achieve debt-free status in close to year, RIL opened Rs. 53,215 crore rights issue for subscription on Monday RIL raised a total capital of Rs. 1,20,320 crores after its last four deals. At the end of financial year 2020, the total debt of the company amounted to Rs. 1,61,035 crores.

As a part of proposed rights issue, RIL shareholders were offered a new share for every 15 held at Rs. 1,257 a share. In the past three decades, this is the first right issue by RIL. The structure of the issue was partly paid shares and enabled shareholders to phase out the outlay on their investment.

“Few companies have potential to transform countries digital ecosystem in the way that Jio Platforms is doing in India and potentially worldwide. Jio Platforms is its true homegrown next generation technology leader in India that is unmatched in its ability to deliver technology solutions and services to a country that is experiencing a digital revolution. We are investing behind Jio Platforms impressive momentum, world-class innovation and strong leadership team, and we view this landmark investment is a strong indicator of KKR’s commitment to supporting leading technology companies in India and Asia Pacific.” said Henry Kravis Co-Founder and Co-CEO of KKR during a statement on Friday.

KKR features a long history of building leading global enterprises and investing in businesses in technology sector, including BMC Software, ByteDance and GoJek through its private equity and technology growth funds. Since foundation, the firm has invested over USD 30 billion (total enterprise value) in tech companies and today the firm’s technology portfolio has 20 plus companies across the Technology, Media and Telecom sectors.