MUMBAI: Mukesh Ambani-led Reliance Industries Ltd’s digital services subsidiary, Jio Platforms Ltd, has emerged as the highest ever grossing company in India in terms of private equity (PE) investments, at a time when the world is under a lockdown and businesses face an uncertain future due to the covid-19 pandemic.
Jio Platforms has announced a sale of 22.38% stake worth ₹1.04 trillion to 10 global investors in just a span of eight weeks—the largest continuous fundraising by any company in the world.
Of this, deals worth at least ₹60,753.36 crore are private equity investments from eight marquee global investors. This is by far the largest known PE investment in a single company in India.
California-based TPG Capital and Greenwich-headquartered L Catterton, on Saturday, said they will invest ₹4,546.80 crore and Rs1,894.50 crore, respectively, in Jio Platforms at an equity value of ₹ 4.91 trillion and an enterprise value of ₹ 5.16 trillion.
Jim Coulter, co-chief executive officer (CEO), TPG, said, “Jio is a disruptive industry leader that is empowering small businesses and consumers across India by providing them with critical, high-quality digital services. The company is bringing unmatched potential and execution capabilities to the market, setting the tone for all technology companies to come.”
TPG is an alternative asset firm with at least $119 billion worth of assets under management
Michael Chu, global co-CEO of L Catterton, said, “We are strong supporters of fostering growth through product development, enhanced digital capabilities and strategic alliances.”
With approximately $20 billion of equity capital across seven fund strategies in 17 offices globally, L Catterton is the largest consumer-focused private equity firm in the world.
The investments will translate into a 0.93% stake for TPG and a 0.39% stake for L Catterton in Jio Platforms.
Jio Platforms has been on a capital raising spree since April end. Starting with Facebook’s ₹43,574 crore investment in April, Jio Platforms has sold stakes to private equity firms KKR & Co., Silver Lake, Vista Equity Partners, General Atlantic, Mubadala, ADIA, TPG and L Catterton.
The deals signify the rapid digitisation opportunity in India, especially after covid-19.
To be sure, PE investments in India have been on an uptrend over the past three years.
Private equity and venture capital investments recorded an all-time high of $48 billion in 2019 in India, according to an Ernst & Young report in February.
“In terms of value, PE/VC investments increased by 28% as compared to 2018, while the deal volume increased by 35%.”
Jio Platforms, with 388 million subscribers, combines all of RIL’s digital and telecom initiatives, including Jio digital services, mobile and broadband, apps, tech capabilities such as artificial intelligence, big data, and Internet of Things, and other investments such as in Den Networks, Hathway Cable, and Datacom Ltd. (a wholly-owned subsidiary of RIL)
The flurry of deals by Jio Platforms are primarily aimed at taking RIL closer to its ambition to become free of its net debt of ₹1.53 trillion (as in December 2019) by March 2021. The Asia’s richest man has seen its flagship RIL’s debt surging in the past few years, especially due to the aggressive expansion of Reliance Jio Infocomm Ltd.
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