Mukesh Ambani’s Reliance Jio Platforms has decided to sell US equity company KKR a 2.32 percent stake in what is the fifth big transaction the top Indian telecom operator signed in just as many weeks.
KKR revealed on Friday that it would invest $1.5 billion in the largest Indian telecommunications provider, a subsidiary of India’s most admired corporation (Reliance Industries), joining fellow American investors Facebook, Silver Lake, Vista Venture Partners and General Atlantic who have made similar bets on Jio Platforms.
KKR ‘s funding, which has written checks over the past four decades to around 20 software firms like ByteDance and GoJek, is worth $65 billion for Reliance Jio Platforms. The announcement today further reflects Jio Platforms’ attractiveness to global investors searching for a slice of the world’s second-largest internet market, which has earned $10.35 billion over the past month by selling around 17 percent of its shares.
Ambani, the chairman and managing director of the oil-to-telecoms conglomerate Reliance Industries, which has invested over $30 billion to develop Jio Platforms, said the company looked forward to leveraging “KKR’s global platform, business experience, and operational skills to expand Jio further.”
India has emerged in recent years as one of the greatest global battlefields for Silicon Valley and Chinese companies aiming to attract the nation’s 1.3 billion people, most of whom remain without a Smartphone and internet access.
Like among others, Amazon, Google, Twitter, Microsoft, Xiaomi, and TikTok-parent Company ByteDance now list India as one of their biggest overseas markets. Nearly half a billion Indians came online for the first time in the last decade, thanks mainly to Reliance Jio, which has accrued more than 388 million subscribers.
Launched in the second half of 2016, Reliance Jio changed India’s telecommunications sector with cutting-edge broadband services and free voice calls, prompting incumbents like Airtel and Vodafone to increase their rates substantially to help subscribers and others to merge and leave the market.
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Jio Platforms, a subsidiary of Reliance Industries, runs the telecommunications company called Jio Infocomm which has become India’s largest telecom operator.
Reliance Jio Networks now operates a number of digital applications and services including JioSaavn music streaming service (which it claims will be public), live on-demand TV and payment systems, as well as Smartphones and broadband sector.
“Jio Platforms is a real indigenous next-generation technology pioneer in India, unrivaled in its ambition to bring technological innovations and services to a world undergoing a digital transformation, “said Henry Kravis, co-founder, and co-head of KKR in a statement.
The new capital should also help Ambani, India’s richest man; further, strengthen his last year’s investor commitment when he pledged to cut Reliance’s net debt from about $21 billion to zero by early 2021 — partly due to the investments he made to build Jio Platforms. The coronavirus epidemic has affected its main sector-oil refining and petrochemicals. Its net income fell by 37 percent in the quarter ended March 31.
Conclusion:
KKR’s dedication to helping leading technology firms in India and the Asia Pacific. This is the single largest (in equity terms) investment made so far from KKR’s Asia private equity firm.
