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Grapevine: Reliance eyes TikTok India, deal with Aramco hits valuation hurdle
Photo Credit: VCCircle

Reliance Industries Limited (RIL) is evaluating the possibility of investing in the India operations of banned Chinese video platform TikTok, at least six people aware of the matter told Bloomberg. 

Kevin A Mayer, CEO of TikTok and operations chief of its privately held parent ByteDance, has reached out to top RIL officials, they said.

The India business of TikTok is likely to be valued at up to $5 billion (Rs 37,408 crore) — or about 10% of the reported $50 billion valuation for the entire company, one of the persons said.

RIL and its telecom unit Jio’s corporate development, strategy and M&A teams are evaluating if any investment or a buyout makes sense at this point. A few external specialists have also been sounded out for providing key inputs, said some of the persons.

Talks are at a preliminary stage and may not lead to a transaction since there are multiple hurdles, said the people.

India banned TikTok in late June, along with 58 other Chinese apps, citing a threat to national security. The ban has affected the app’s 200 million registered users in India.

Separately, RIL’s mega potential deal with the world’s top crude oil producer, Saudi Arabian Oil Co. (Aramco), may get delayed over valuation hurdles, two people told Mint.

The deal was announced last August wherein Aramco was to pick up a 20% stake in the company’s refining, petrochemicals and fuels marketing businesses for $15 billion, at an enterprise value of $75 billion.

Last month, promoter Mukesh Ambani, at the annual general meeting, said that the deal has not progressed as per the original timeline.

According to Bernstein Research, RIL’s last year’s valuation of $75 billion could have fallen to a gross valuation of nearly $57 billion as on 16 July. Crude prices have fallen 23.44% since the deal was originally announced.

Also, Classplus, which runs a classroom management app for tutors, is in advanced talks to raise up to $15 million (Rs 112 crore) in a round of funding from Falcon Edge. The round would be raised at a valuation of up to $70 million (Rs 524 crore), three people aware of the details told Entrackr.

“The conversation is in its last leg, and Falcon Edge has already given a term sheet,” said one of the persons. The round may be stretched to $20 million since two more investors are in initial talks, he added.

The Noida-based venture had previously raised $9 million (Rs 73 crore) in May. The Series B round was led by RTP Global and Sequoia’s Surge Ventures.

In February, the company secured $2.5 million in a pre-Series A funding led by Blume Ventures and Sequoia.

A sum of $1.6 million was raised from Times Internet in May 2019.

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