General Atlantic invests $870M in Reliance's Jio Platforms in its largest Asia deal
US private equity giant General Atlantic has invested $870 million (approximately Rs 6,598 crore) in Reliance's Jio Platforms in its largest deal in Asia so far.
The investment gives General Atlantic a 1.34 percent stake in Jio Platforms on a fully diluted basis, Reliance Industries announced.
With this, Reliance has divested 15 percent in Jio Platforms in less than a month, valuing the internet company at about $65 billion.
Prior to General Atlantic, Facebook, Silver Lake Partners, and Vista Equity Partners had also picked up stakes in Jio Platforms. Reliance is also believed to be courting Saudi Arabia's sovereign wealth fund for an equity sale, as it looks to make Jio debt-free.
Reliance Industries Chairman Mukesh Ambani with son and Reliance Jio Director Akash Ambani
Calling General Atlantic a "marquee global investor and a valued partner", Reliance Industries Chairman and MD Mukesh Ambani said,
"I have known General Atlantic for several decades and greatly admired it for its belief in India’s huge growth potential. General Atlantic shares our vision of a Digital Society for India and strongly believes in the transformative power of digitisation in enriching the lives of 1.3 billion Indians. We are excited to leverage General Atlantic’s proven global expertise and strategic insights across 40 years of technology investing for the benefit of Jio.”
With the latest investment, Jio Platforms, which comprises 15+ applications across telecom, connectivity, commerce, e-health, content, gaming, entertainment, etc., has raised Rs 67,194.5 crore (roughly $8.9 billion) in less than four weeks.
Bill Ford, Chief Executive Officer of General Atlantic, said in a statement,
“As long-term backers of global technology leaders and visionary entrepreneurs, we could not be more excited about investing in Jio. We share Mukesh’s [Ambani] conviction that digital connectivity has the potential to significantly accelerate the Indian economy and drive growth across the country. General Atlantic has a long track record working alongside founders to scale disruptive businesses, as Jio is doing at the forefront of the digital revolution in India.”
Analysts believe that the increasing interest from foreign tech investors is paving the path for Jio Platforms going public, and also becoming profitable by the end of this year.
Sanchit Vir Gogia, Founder and CEO, Greyhound Research, said, "RIL’s ambitions for Jio are broader and deeper than what meets the eye. It always wanted to take Jio beyond connectivity. Jio is a data, technology, and ecosystem opportunity. Connectivity is the lubricant for the engines of community, content, commerce, currency, and capital. The intent is to leverage tech to capitalise on assets across RIL portfolio companies."
Reliance Jio net profits for the quarter ended March 31, 2020, stood at Rs 2,331 crore, growing 72 percent from the December quarter. Jio's total subscriber base stands at 387.5 million, making it India's largest telecom network.