Private equity firm KKR is set to invest Rs 11367 crore in Jio Platforms for a 2.32% stake. This will be the fifth investment in the Reliance Industries Ltd (RIL) business in rapid succession, following those by social media major Facebook, private equity funds Silver Lake, Vista Equity Partners and General Atlantic. Analysts expect more such deals to take place.
“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% equity stake in Jio Platforms on a fully diluted basis,” RIL said in a release on Friday.
ET in its May 21 edition had reported about KKR’s possible investment in Jio Platforms.
With the latest deal, Jio Platforms will get a combined Rs78,562 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. 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.
General Atlantic on May 18 said it will buy 1.34% stake in Jio Platforms for Rs6,598.38 crore, while Vista Equity Partners said on May 8 it will be picking up a 2.32% stake for Rs11,367 crore. Prior to that, US private equity firm Silver Lake said it will invest Rs5,655.75 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.
“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,” RIL chairman Mukesh Ambani said in the statement. “We are looking forward to leveraging KKR’s global platform, industry knowledge and operational expertise to further grow Jio.”
KKR is making the investment from its Asia private equity and growth technology funds.
“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,” Henry Kravis, Co-Founder of KKR, said in the statement.
“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 added.
Founded in 1976, KKR’s investments include 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 the firm’s technology portfolio has more than 20 companies across the technology, media and telecom sectors.
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India has been a key strategic market for KKR with a history of investing in the country since 2006, the release said.
“Diverse marquee investors are becoming long-term shareholders of 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,” RIL said.
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.