KKR to in­vest ₹11,367 crore in Am­bani’s Jio

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MUM­BAI: Mukesh Am­bani has lured more than $10 bil­lion of in­vest­ment for his In­dia-based dig­i­tal plat­form busi­ness in a month, even as the econ­omy strug­gles un­der the world’s most strin­gent lock­down to pre­vent the spread of the coron­avirus.

New York-based KKR & Co on Fri­day be­came the lat­est pri­vate eq­uity firm to in­vest in Jio Plat­forms Ltd, the tele­com and dig­i­tal ser­vices hold­ing com­pany con­trolled by Am­bani’s Re­liance In­dus­tries Ltd, the com­pany said in a state­ment.

The pri­vate eq­uity fund will pay ₹11,367 crore ($1.5 bil­lion) for a 2.3% stake in Jio.

MUM­BAI:Mukesh Am­bani, Asia’s rich­est man, has lured more than $10 bil­lion of in­vest­ment for his In­dia-based dig­i­tal plat­form busi­ness in a month, even as the econ­omy strug­gles un­der the world’s most strin­gent lock­down to pre­vent the spread of the coron­avirus.

New York-based KKR & Co. on Fri­day be­came the lat­est pri­vate eq­uity firm to in­vest in Jio Plat­forms Ltd, the tele­com and dig­i­tal ser­vices hold­ing com­pany con­trolled by Am­bani’s Re­liance In­dus­tries Ltd, the Mum­baibased com­pany said in a state­ment. The pri­vate eq­uity fund will pay ₹11,367 crore ($1.5 bil­lion) for a 2.3% stake in Jio.

Am­bani has been sell­ing stakes in Jio in sup­port of a vow to bring net debt of more than $20 bil­lion to zero at his oil, re­tail and telecom­mu­ni­ca­tions group be­fore March 2021.

The deals with US-based giants from Face­book Inc. to Sil­ver Lake and Gen­eral At­lantic bol­ster Am­bani’s plan to shift away from oil and petro­chem­i­cals to­ward faster-grow­ing con­sumer busi­nesses.

“Re­liance In­dus­tries is po­si­tion­ing it­self as a global tech­nol­ogy com­pany with in­ter­na­tional tech­nol­ogy and pri­vate eq­uity play­ers lin­ing up for a Jio PlatAm­bani’s forms stake,” said Sudeep Anand, head of in­sti­tu­tional re­search at IDBI Cap­i­tal Mar­ket Ser­vices Ltd. The sales are also “an­other step to­ward achiev­ing a zero net­debt com­pany by cal­en­der year 2020,” he said.

While global giants in­clud­ing Ama­zon.com Inc. and Wal­mart Inc. have also made big bets on growth in In­dia’s con­sumer mar­kets, the com­pa­nies have faced chal­lenges in scal­ing their mod­els on­line in In­dia, where re­stric­tions pro­tect small re­tail­ers. Am­bani has vowed to build an e-com­merce busi­ness that works around the bar­ri­ers by re­cruit­ing so-called ki­rana shops as part­ners.

KKR said Fri­day its in­vest­ment in Jio is it’s largest in Asia and that Am­bani’s goals played a big role in a quick de­ci­sion.

“The busi­ness model is scal­able to meet the de­mand of as­pir­ing In­di­ans,” San­jay Na­yar, head of KKR’s In­dian busi­ness, said in an in­ter­view, adding that the PE firm com­pleted the deal in 10 days. “We in­vested in Mukesh

en­tre­pre­neur­ial vi­sion backed by a world class man­age­ment.”

The fund has also put money into tech­nol­ogy-driven com­pa­nies like en­ter­prise so­lu­tions provider BMC Soft­ware Inc., ByteDance Ltd, owner of the Tik­Tok so­cial video plat­form, and In­done­sia-based ride-hail­ing and food-de­liv­ery giant Go­Jek.

Am­bani’s suc­cess in draw­ing big, sea­soned tech in­vestors to Jio comes de­spite a sharp drop in eco­nomic growth caused by the pan­demic and un­cer­tainty about how much da­m­age will be done be­fore the deadly pathogen is un­der con­trol. The will­ing­ness of in­vestors to bear those risks un­der­scores Am­bani’s ap­peal as a de­ter­mined, ca­pable em­pire builder and the prospects for us­ing Jio’s 400 mil­lion wire­less phone users as a spring­board into dig­i­tal ser­vices.

Jio Plat­forms com­bines the con­glom­er­ate’s dig­i­tal as­sets with its wire­less car­rier, Re­liance Jio In­fo­comm Ltd, into a hold­ing com­pany aimed at be­com­ing a top e-com­merce and pay­ments op­er­a­tor in In­dia’s con­sumer mar­ket.

Started in 2016, Re­liance Jio is now In­dia’s largest wire­less car­rier. The op­er­a­tor stormed past ri­vals by build­ing a na­tion­wide 4G net­work, then of­fer­ing free call­ing and data ser­vices at prices es­tab­lished com­peti­tors with older net­works could not match with­out los­ing money.

THE FIVE RE­CENT DEALS WILL BOL­STER RIL’S AIM TO SHIFT FROM OIL AND PETROCHEM TO­WARD FMCG BUSI­NESSES

MINT

The pri­vate eq­uity fund will ac­quire a 2.3% stake in Jio, bring­ing to­tal in­vest­ments in the plat­form to $10 bil­lion in a month.

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