KKR will in­vest ₹11,367 cr in Jio for 2.32% stake

Hindustan Times (Noida) - - Front Page - Anirudh Laskar and Swaraj Singh Dhan­jal anirudh.l@livemint.com Rid­hima Sax­ena con­tributed to the story.

NEW DELHI: New York-based KKR & Co on Fri­day be­came the lat­est pri­vate eq­uity firm to in­vest in Mukesh Am­bani’s Jio Plat­forms Ltd, the com­pany said in a state­ment. It will pay ~11,367 crore for a 2.3% stake in Jio, whose val­u­a­tion surged to $65 bil­lion, mak­ing it In­dia’s sec­ond-most valu­able stand-alone tech business.

MUM­BAI:KKR and Co. Inc. said on Fri­day it will in­vest ₹11,367 crore in Re­liance In­dus­tries Ltd’s (RIL’S) dig­i­tal as­sets sub­sidiary Jio Plat­forms Ltd, in what would be its sin­gle-largest in­vest­ment in Asia so far.

The deal will fetch the New York-based pri­vate eq­uity (PE) giant a 2.32% stake in Jio Plat­forms, which is in a capital rais­ing spree, hav­ing swung five hefty share sale deals in just a month’s time, in­clud­ing the lat­est trans­ac­tion.

For Jio Plat­forms, KKR’S in­vest­ment will take Mukesh Am­bani-pro­moted RIL closer to its tar­get of shed­ding net debt worth ₹1.53 lakh crore by March 2021. RIL has man­aged to get in­vest­ment com­mit­ments from five mar­quee global in­vestors that will help it re­pay more than half of its net debt.

This is sig­nif­i­cant, given the deals were struck in a sub­dued eq­uity mar­ket due to the Covid-19 pan­demic. Many of these in­vest­ment dis­cus­sions were ini­ti­ated at least six months ago.

To­gether, the five deals al­low Jio Plat­forms to raise about ₹78,561.75 crore.

Face­book’s April an­nounce­ment that it would in­vest $5.7 bil­lion for a 9.99% stake in Jio was quickly fol­lowed by $750 mil­lion from Sil­ver Lake and $1.5 bil­lion from Vista Eq­uity Part­ners. On 17

May, Jio Plat­forms said it was rais­ing $870 mil­lion from an­other New York-based pri­vate eq­uity powerhouse, Gen­eral At­lantic.

For KKR, the in­vest­ment in Jio is a bet on grow­ing digi­ti­sa­tion, with more and more con­sumers spends mov­ing to on­line from off­line and Jio’s holis­tic ap­proach in tap­ping the dig­i­tal op­por­tu­nity of the In­dian mar­ket.

“If you look at the ra­tio­nale, there are sev­eral lay­ers of op­por­tu­ni­ties: you’ve got strong, foun­da­tional in­fra­struc­ture, high­qual­ity tech­nol­ogy in­fra­struc­ture, and most of the in­vest­ment (by Jio) has al­ready been made,” said San­jay Na­yar, chief ex­ec­u­tive of­fi­cer of KKR In­dia.

“Among their ini­tia­tives has been the bundling of more dig­i­tal ser­vices with their own smart­phone de­vices and the Myjio app—and of­fer­ing these bun­dled ser­vices to In­dian con­sumers at a re­ally af­ford­able price. On top of that, you have this in­cred­i­bly rich en­ter­prise story and its as­sis­tance to small busi­nesses, as well as the e-com­merce and dig­i­tal op­por­tu­nity.”

Na­yar pointed out that Jio’s ef­forts come at a time when In­dia is digi­tis­ing rapidly. “Digi­ti­sa­tion has been a ma­jor fo­cus, and it is the only ef­fi­cient way to reach In­di­ans in ru­ral In­dia. And if you can de­liver ser­vices to peo­ple at the right af­ford­abil­ity lev­els, they will take the op­por­tu­nity. That is a strong the­sis here.”

BLOOMBERG

The in­vest­ment will take Re­liance In­dus­tries closer to its tar­get of shed­ding net debt worth ₹1.53 lakh crore by March 2021.

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