Reliance Industries Ltd said on Sunday US-based private equity firm General Atlantic will invest Rs 6,598.38 crore ($870 million) in Jio Platforms Ltd, as it roped in the fourth foreign investor for its digital unit within a month.
General Atlantic will get a 1.34% stake in Jio Platforms on a fully diluted basis, the Indian energy-to-telecom conglomerate said in a statement.
With this investment, Jio Platforms has raised Rs 67,194.75 crore from four investors—Facebook Inc., Silver Lake Partners, Vista Equity Partners and General Atlantic—in less than four weeks, Reliance said.
This investment values Jio Platforms at an equity value of Rs 4.91 trillion and an enterprise value of Rs 5.16 trillion. This is the same as the valuation in the investments made by private equity firms Silver Lake and Vista Equity, but 12.5% higher than the level at which social media giant Facebook had put in money.
General Atlantic, a growth equity investor, backs companies mainly in the technology, consumer, financial services and healthcare sectors. In the technology sector, it has invested in companies such as Airbnb, Alibaba, Ant Financial, ByteDance, Facebook, Slack, Snapchat and Uber.
General Atlantic has been operating in India since 1999. It has about a dozen investment professionals in India.
It has previously invested in ed-tech startups Unacademy and Byju’s, payments company Billdesk, outsourcing services provider Genpact and property listings portal NoBroker. Outside the technology sector, it has backed companies such as mortgage lender PNB Housing Finance Ltd, restaurant chain Absolute Barbeque Pvt. Ltd and the National Stock Exchange.
The Jio deal marks a leap of faith for India investments by the PE firm, which has typically signed small cheques in the range of $30-50 million but has also bet over $100 million in around a dozen companies in the country. General Atlantic’s single-biggest India transaction to date was its $250-million in NYSE-listed Genpact.
General Atlantic was also in talks to write a large cheque to e-commerce firm Flipkart in 2011. However, the deal didn’t materialise and it missed out on what could have been a bumper harvest in 2018 when Walmart Inc. acquired the online retailer in the biggest India-related takeover ever.
Reliance, led by billionaire and India’s richest man Mukesh Ambani, had created Jio Platforms late last year to house all its digital businesses. At the time, it had absorbed the $13.5 billion debt of Reliance Jio Infocomm Ltd, its telecommunications arm. The fundraising from the four investors will help Ambani pare the debt.
The four deals over the past month shows that Reliance isn’t slowing down its dealmaking activities despite the worldwide turmoil caused by the coronavirus pandemic.
Even before these flurry of deals, Reliance had sealed or unveiled a couple of big-ticket transactions with foreign investors. Last year, Reliance had sliced out its telecom infrastructure assets including towers and roped in Canadian investor Brookfield to seal the biggest private equity deal ever in India worth some $3.7 billion.
Also last year, it announced plans to sell a 20% stake in its oil-to-chemicals business to Saudi Aramco for around $15 billion.
The transaction with General Atlantic is subject to regulatory and other customary approvals.
Morgan Stanley acted as financial adviser to Reliance Industries. AZB & Partners and Davis Polk & Wardwell acted as legal counsel. Paul, Weiss, Rifkind, Wharton & Garrison and Shardul Amarchand Mangaldas & Co. acted as legal counsel to General Atlantic.