Reliance Industries Limited (RIL) on Friday announced that private equity firm KKR will invest Rs 11,367 crore in Jio Platforms for a 2.32 per cent stake.
This will be the fifth investment in RIL in succession, following those by social media major Facebook, private equity funds Silver Lake, Vista Equity Partners and General Atlantic.
“This transaction values Jio Platforms at an equity value of Rs4.91 lakh crore and an enterprise value of Rs5.16 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,” RIL said in a release on Friday.
With the latest deal, Jio Platforms will get a combined Rs 78,562 crore from the five 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.
Chairman and Managing Director Mukesh Ambani in a statement on Friday said, “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.”
The transaction is subject to regulatory and other customary approvals, the company said.
Prior to this, General Atlantic on May 18 said it will buy 1.34 per cent stake in Jio Platforms for Rs 6,598.38 crore, while Vista Equity Partners said on May 8 it will be picking up a 2.32 per cent stake for Rs 11,367 crore.
Prior to that, US private equity firm Silver Lake said it will invest Rs 5,655.75 crore in Jio Platforms for a 1.15 per cent stake and on April 22, Facebook said it would invest USD 5.7 billion for a 9.99 per cent stake.
RIL opened its Rs 53,215 crore rights issue for subscription on Monday in an effort to achieve debt-free status in close to a year.
The total capital raised by RIL after its last four deals amounted to Rs 1,20,320 crore. The company had total debt of Rs 1,61,035 crore at the end of FY 20.
As part of the proposed rights issue, RIL shareholders were offered a new share for every 15 held at Rs 1,257 a share. This is the first rights issue by RIL in three decades. The issue was structured as partly paid shares and enabled shareholders to phase out the outlay on their investment over a period of time.
Henry Kravis, Co-Founder and Co-CEO of KKR, in a statement on Friday 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.”
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 today the firm’s technology portfolio has more than 20 companies across the Technology, Media and Telecom sectors.