Google picks up 7.7% stake in Reliance’s Jio for $4.5 bn
Photo Credit: Reuters

Reliance Industries Ltd said on Wednesday Alphabet Inc.’s Google will invest Rs 33,737 crore ($4.5 billion) in Jio Platforms Ltd, as it roped in another US technology giant after Facebook Inc. for its digital unit.

Google will get a 7.73% stake in Jio Platforms for its investment, the Indian energy-to-telecom conglomerate said in a statement.

Jio and Google will also jointly develop an entry-level smartphone to accelerate the path to India’s digitization, the statement said.

The announcement comes just a day after Google CEO Sundar Pichai said that the tech giant would invest $10 billion in India for digitisation initiatives.

“Reliance Industries, and Jio Platforms in particular, deserve a good deal of credit for India’s digital transformation... our joint collaboration will focus on increasing access for hundreds of millions of Indians who don’t currently own a smartphone while improving the mobile experience for all,” Pichai said on Wednesday.

Google’s investment takes the total amount that Jio Platforms has raised over the past three months to Rs 1,52,056 crore ($20.2 billion), Reliance chairman Mukesh Ambani said at the company’s annual shareholders meeting.

Google is the 13th investor in Jio Platforms. The other investors are Facebook Inc, Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala Investment Company, Abu Dhabi Investment Authority, TPG, L Catterton, Saudi Arabia’s Public Investment Fund (PIF), Intel Capital and Qualcomm Ventures.

Facebook invested Rs 43,574 crore in Jio Platforms, Vista Equity, PIF and KKR Rs 11,367 crore each, and General Atlantic Rs 6,598.38 crore. Silver Lake and co-investors are putting in Rs 10,202.55 crore while TPG and L Catterton are investing Rs 4,546.8 crore and Rs 1,894.5 crore, respectively.

Intel Capital is investing Rs 1,894.50 crore while Qualcomm Ventures has agreed to invest Rs 730 crore.

The Google investment values Jio Platforms at an equity value of Rs 4.36 trillion. This is lower than the Rs 4.91 trillion valuation at which PE firms have invested.

Reliance Industries had created Jio Platforms late last year to house all its digital business while absorbing the entire $13.5-billion debt of its telecom business, Reliance Jio Infocomm Ltd. This was seen as a precursor to monetise the telecom business that requires more capital investments to move to a next-generation ecosystem.

Previously, Reliance had spliced 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.

Reliance also plans to sell a 20% stake in its oil-to-chemicals business to Saudi Aramco for around $15 billion.

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