Jio platforms bag ₹11,367 crore investment from KKR

Joanna Estrada
May 23, 2020

Mukesh Ambani, Chairman and Managing Director, in a statement on Friday said, "I am delighted to welcome KKR, one of the world's most respected financial investors, as a valued partner in our onward march to growing and transforming the Indian digital ecosystem for the benefit of all Indians".

"We are investing behind Jio Platforms' impressive momentum, world-class innovation and strong leadership team", Henry Kravis, co-founder and co-chief executive of the United States buyout firm, said in a statement on Friday.

Of the ₹43,574 crore that it will receive from Facebook, Jio plans to use ₹28,000 crore to redeem optionally convertible preference shares (OCPS) of its parent RIL and retain ₹15,000 crore in its books, Jio's top management had said in a conference call on 22 April.

Prior to this, the company had sold a 9.99% stake to Facebook for Rs. 43,574 crore, 1.15% to Silver Lake for Rs. 5,655.75 crore, a 2.32% to Vista Equity for Rs. 11,367 crore, and 1.34% to General Atlantic for Rs. 6,598.38 crore.

Jio Platforms is an umbrella company that manages Reliance's digital services like Reliance Jio, Jio Fiber, MyJio, JioTV, JioCinema, Jio Mart JioNews and JioSaavn under one banner. Kravis and Roberts are cousins who worked at Bear Stearns before starting KKR.KKR raised its first $1 billion institutional fund in 1984, and eventually went on to expand its presence across Europe, the Middle East and the Asia Pacific region. The stake purchase in JPL was the largest investment by New York-based General Atlantic in Asia.

This is KKR's largest investment in Asia and will translate into a 2.32 per cent equity stake in Jio Platforms on a fully diluted basis.

As part of its plans to be debt-free, RIL is also raising ₹53,215 crore via a rights issue, a process that's now underway. The Indian conglomerate has spent about Rs 4 lakh crore to build Reliance Jio.

KKR has invested more than $30bn in tech companies, including China's ByteDance and Indonesian digital payments firm GoJek.

The transaction is subject to regulatory and other customary approvals.

Often saying "data is the new oil", Ambani has sought to diversify his empire away from energy and petrochemicals, beginning in 2016 with the establishment of Jio Infocomm which is now India's biggest telecom carrier with more than 376 million subscribers. "Jio Platforms is a true homegrown next-generation technology leader in India that is unmatched in its ability to deliver technology solutions and services to a country that is experiencing a digital revolution", said Henry Kravis, Co-Founder and Co-CEO of KKR. It has also invested in telecom and media sectors.

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