Global investment firm KKR will pick up a 2.32% stake in Jio Platforms for Rs 11,367 crore ($1.5 billion), making this its largest investment in Asia.
Global investment firm KKR will pick up a 2.32% stake in Jio Platforms for Rs 11,367 crore ($1.5 billion), making this its largest investment in Asia. The move will further put Reliance Industries (RIL) on road to becoming debt free this year. RIL’s net debt currently stands at Rs 1.6 lakh crore.
KKR is making the investment from its Asia private equity and growth technology funds. The deal further repositions Jio Plarforms as a technology company.
This is the fifth investment that Jio has got within one month. Now, together with the $5.8 billion infusion by Facebook, announced on April 21, Silver Lake at $750 million, announced on May 4, Vista Equity Partners at $1.5 billion, announced on May 8, General Atlantic investment of $875 million on May 17, KKR’s investments takes the equity inflow into Jio Platforms to $10.32 billion (Rs 78,562.13 crore) and total equity sale to over 17%.
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.
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.
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 $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.
Henry Kravis, co-founder and Co-CEO of KKR, said, “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”.
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.
The RIL management has said it would like to be debt-free by 2020. Analysts at Morgan Stanley have said that the company continues to deleverage its balance sheet via stake sales in subsidiaries, rights issues and slowing down new investment.