Jio Platforms raises Rs. 11,367 crore from KKR: Details here
What's the story
Jio Platforms, the company holding the telecom and digital businesses of Reliance Industries Limited (RIL), has raised Rs. 11,367 crore ($1.5 billion) from US-based equity firm KKR. The investment comes as the fifth major deal for the Mukesh Ambani-led giant and is expected to help towards clearing RIL's ginormous Rs. 1.61 lakh crore debt in the coming months. Here is more about it.
Deal
Selling 2.32% stake
On Friday morning, KKR announced the decision to invest Rs. 11,367 crore ($1.5 billion) for a 2.32% stake in Jio Platforms. The investment values Jio Platforms at an equity value of Rs. 4.91 lakh crore and an enterprise value of Rs. 5.16 lakh crore, the same implied in the recent deals with Silver Lake, Vista Equity, and General Atlantic.
Previous investments
Over Rs. 78,500 crore raised in one month
The latest capital infusion takes the total funds raised by Jio Platforms within the last one month to Rs. 78,561.75 crore. 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.
KKR
KKR has invested in some high-profile firms
Like other recent Jio investors, KKR, formerly known as Kohlberg Kravis Roberts & Co., has also invested in some very high-profile tech companies, including giants like ByteDance and GoJek. Ambani said Reliance and Jio Platforms were looking forward to leveraging "KKR's global platform, industry knowledge, and operational expertise to further grow Jio" and its wide range of products.
Jio Platforms
Jio Platforms dominates India's digital and telecom space
Jio Platforms dominates India's digital space; within just three-and-a-half years of launch, its telecom business - Jio Infocomm - became the biggest in the country with a whopping 388 million subscribers. And, that is not it. Jio Platforms also holds Reliance's home broadband business Jio Fiber, feature phone business, music streaming service JioSaavn, on-demand live television service, and a payments service, among other things.
Quote
Here's what Henry Kravis, KKR CEO, said on the deal
"We are investing behind Jio Platforms' impressive momentum, world-class innovation and strong leadership team, and we view this landmark investment as a strong indicator of KKR's commitment to supporting leading technology companies in India and the Asia Pacific." This is KKR's largest investment in Asia.
Goal
Goal to clear debts by the end of 2020
This and previous investments would ultimately help Ambani fulfill his goal of making Reliance Industries debt-free by early 2021. The company has a total net debt of Rs. 1.61 lakh crore, of which it expects to raise Rs. 1.04 lakh crore by June, RIL CFO Srikanth Venkatachari said in a recent earnings call. The rest is expected to be cleared by the year-end.