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KKR to invest $1.5 bn in Reliance’s Jio Platforms in biggest Asia deal
Photo Credit: Shah Junaid/VCCircle

Reliance Industries Ltd said on Friday US-based private equity giant KKR will invest Rs 11,367 crore ($1.5 billion) in Jio Platforms Ltd, taking the total it has raised for the digital unit to more than $10 billion.

This is KKR’s largest investment in Asia and will translate into a 2.32% equity stake in Jio Platforms, Reliance said in a statement. The investment is being made via the alternative asset manager’s Asia private equity and growth technology funds.

With this investment, Jio Platforms has raised Rs 78,562 crore ($10.4 billion) from five investors—Facebook Inc., Silver Lake Partners, Vista Equity Partners, General Atlantic and KKR—in just a month.

Facebook is investing Rs 43,574 crore in Jio Platforms, Vista Equity Rs 11,367 crore and Silver Lake Rs 5,655.75 crore. General Atlantic will invest Rs 6,598.38 crore.

The KKR 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, Vista Equity and General Atlantic, but 12.5% higher than the level at which social media giant Facebook had put in money.

“KKR has a proven track record of being a valuable partner to industry-leading franchises and has been committed to India for many years,” RIL chairperson and managing director Mukesh Ambani said.

Shares of RIL were trading 0.28% up at Rs 1,444.15 at the time of writing this report.

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 five 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 company is also undergoing a Rs 53,125 crore (around $7 billion) rights issue, which began earlier this month. The 1:15 rights issue is offering shares at a 14% discount to its closing price of Rs 1,467.05 on April 30.

Morgan Stanely, AZB & Partners and Davis Polk & Wardwell acted as the financial and legal counsels to RIL on the transaction. 

Deloitte Touche Tohmatsu India LLP, Shardul Amarchand Mangaldas & Co and Simpson Thacher & Bartlett LLP acted the financial and legal advisors to KKR.

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