TPG, L Catterton join other heavyweights with $850 mn cheque for Reliance\'s Jio Platforms
Photo Credit: VCCircle

Reliance Industries Ltd said on Saturday private equity firms TPG and L Catterton will invest Rs 4,546.8 crore ($600 million) and Rs 1,894.5 crore ($250 million), respectively, in Jio Platforms Ltd, as the Indian conglomerate roped in two more investors for its digital unit.

This comes a week after Reliance brought in two investment arms of the emirate of Abu Dhabi, Abu Dhabi Investment Authority (ADIA) and Mubadala, scooping up nearly $1.8 billion from the UAE investors.

TPG's investment will translate into a 0.93% stake while L Catterton will hold 0.39% in Jio Platforms, Reliance said.

TPG, which has been active in the country for almost two decades, is making the investment from its TPG Capital Asia, TPG Growth and TPG Tech Adjacencies funds. This deal matches its previous biggest India-related investment where it had backed agro-chemicals firm UPL with $600 million cheque to buy US-based Arysta LifeScience Inc in 2018.

For L Catterton, this is the biggest India transaction and is unlike its previous bets where it stuck to its core consumer-themed investments. The PE firm that is associated with luxury products giant LVMH had raised $1.45 billion in a new fund last year. It is not clear if the Jio investment is being routed through this fund vehicle. In India, L Catterton has previously invested in firms like PVR, FabIndia, Future Lifestyle and restaurant chain operator Impresario. Jio is its first new investment in over two years, according to VCCEdge, the data research platform of VCCircle.

With these investments, Jio Platforms has raised Rs 104,326.95 crore ($13.9 billion) from nine investors—Facebook Inc., Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala, ADIA, L Catterton and TPG—in just under two months.

Facebook is investing Rs 43,574 crore in Jio Platforms, Vista Equity Rs 11,367 crore and General Atlantic Rs 6,598.38 crore. Silver Lake and co-investors are putting in Rs 10,202.55 crore while KKR is investing Rs 11,367 crore.

The TPG and L Catterton investments value 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 KKR, Silver Lake, Vista Equity, Mubadala, ADIA and General Atlantic, but 12.5% higher than the level at which social media giant Facebook had put in money.

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 nine investors will help Ambani pare the debt.

These deals show 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 has also raised around $7 billion from a rights issue this month.

Morgan Stanley acted as financial adviser to Reliance Industries. AZB & Partners and Davis Polk & Wardwell acted as legal counsels. Shardul Amarchand Mangaldas & Co acted as legal counsel for TPG.

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