Telecom war heats up as India billionaires get backing of global investors
FUND IS LATEST GLOBAL HEAVYWEIGHT TO INVEST IN RELIANCE TELECOM UNIT
Mubadala Investment Company is pumping $1.2 billion into India’s Reliance Industries owned Jio Platforms, the country’s leading digital services platform. The investment will translate into a 1.85 per cent stake in Jio on a fully diluted basis.
The deal gives the Abu Dhabi sovereign fund a stake of 1.85 per cent at an equity value of $65 billion for Jio Platforms, the Mumbai-based company said on Friday in a statement. Reliance, backed by Asia’s richest man Mukesh Ambani, is also in advanced talks with Abu Dhabi Investment Authority and Saudi Arabia’s Public Investment Fund, sources said.
With the latest investment, Jio has raised $11.6 billion (Dh43 billion) from leading global technology and investment funds — including Facebook, Silver Lake, Vista Equity Partners, General Atlantic and KKR — in recent weeks.
Reliance is owned by Indian billionaire Mukesh Ambani.
“We are committed to investing in, and actively working with, high-growth companies which are pioneering technologies to address critical challenges and unlock new opportunities,” said Khaldoon Al Mubarak, Managing Director and Group CEO, Mubadala Investment Company.
‘Transformed connectivity’
“We have seen how Jio has already transformed communications and connectivity in India, and as an investor and partner, we are committed to supporting India’s digital growth journey.
“With Jio’s network of investors and partners, we believe that the platform company will further the development of the digital economy.”
“I am delighted that Mubadala, one of the most astute and transformational global growth investors, has decided to partner us in our journey to propel India’s digital growth towards becoming a leading digital nation
in the world,” said Ambani, who is Chairman and Managing director of Reliance Industries.
The string of investments will go toward Ambani’s stated goal of slashing net debt to zero at Reliance Industries, an oil refining, petrochemicals, retail and telecommunications conglomerate that’s India’s largest company. The outside money has also helped set a valuation for Jio as it prepares for a listing. The Mubadala deal gives Jio an enterprise value of $68 billion, according to Reliance.
Shares soar
The have sent Reliance Industries shares soaring 80 per cent since late March.
Facebook invested $5.7 billion in Jio in April for a roughly 10 per cent stake. The vast social media network is looking to build a commerce business for its WhatsApp messaging service and was eager to work with Jio to take advantage of the company’s JioMart e-commerce platform and its relationship with Indian merchants.
Facebook has a massive presence in India, with more than 400 million WhatsApp users alone, and the two sides had worked together previously when Facebook built a version of its WhatsApp messaging product for a Jio phone in 2018.