Reliance Industries on Friday announced the sale of a 2.32 per cent stake in its digital arm to US private equity giant KKR for Rs 11,367 crore, the fifth deal in four weeks that will inject a combined Rs 78,562 crore in the oil-to-telecom conglomerate to help it pare debt.
This is KKR’s largest investment in Asia.
“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 per cent equity stake in Jio Platforms on a fully diluted basis,” the company said in a statement.
The deal follows Facebook picking up a 9.99 per cent stake in the firm, housing India’s youngest but largest telecom company, on April 22 for Rs 43,574 crore.
Within days of that deal, Silver Lake – the world’s largest tech investor – bought a 1.15 per cent stake in Jio Platforms for Rs 5,665.75 crore.
On May 8, US-based Vista Equity Partners bought 2.32 per cent stake in Jio Platforms for Rs 11,367 crore. On May 17 global equity firm General Atlantic picked up 1.34 per cent stake in Jio Platforms for Rs 6,598.38 crore.
“Over the last month, leading technology investors, such as, Facebook, Silver Lake, Vista, General Atlantic and KKR have announced aggregate investments of Rs 78,562 crore into Jio Platforms,” it said.
Diverse marquee investors are becoming long-term shareholders of Jio Platforms Ltd (JPL) because of a unique set of technologies and platforms under one entity. There are no similar opportunities available anywhere else globally. And an endorsement of the quality of the management.
Investments by leading global growth investors will enable Jio to scale its ecosystem and reaffirm the firm as a next generation software product and platform company.
“Jio Platforms, a wholly-owned subsidiary of Reliance Industries, is a next-generation technology platform focused on providing high-quality and affordable digital services across India, with more than 388 million subscribers,” the statement said.
Founded in 1976, KKR has a long history of building leading global enterprises and successfully investing in businesses in the technology sector, including BMC Software, ByteDance and GoJek, through its private equity and technology growth funds.
Since inception, the firm has invested over USD 30 billion (total enterprise value) in tech companies, and its technology portfolio currently has more than 20 companies across the technology, media and telecom sectors.
In addition, India has been a key strategic market for KKR with a history of investing in the country since 2006.
Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said, “I am delighted to welcome KKR, one of the world’s most respected financial investors, as a valued partner in our onward march to growing and transforming the Indian digital ecosystem for the benefit of all Indians.”
KKR, he said, 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.”
Henry Kravis, Co-Founder and Co-CEO of KKR, 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. Jio Platforms is a 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 as a strong indicator of KKR’s commitment to supporting leading technology companies in India and Asia Pacific,” he said.
KKR is making the investment from its Asia private equity and growth technology funds.
The transaction is subject to regulatory and other customary approvals.
Morgan Stanley acted as financial advisor to Reliance Industries, and AZB & Partners and Davis Polk & Wardwell acted as legal counsel.
Deloitte Touche Tohmatsu India LLP acted as financial advisor to KKR. Shardul Amarchand Mangaldas & Co. and Simpson Thacher & Bartlett LLP acted as legal counsel to KKR.