Jio Platforms scores another investment: $1.5bn from Saudi Arabia's PIF
Mukesh Ambani's Jio Platforms has scored yet another multi-billion-dollar investment. The company, which holds the telecom and digital businesses of Reliance Industries Limited (RIL), has raised Rs. 11,367 crore ($1.5 billion) from Saudi Arabia's Public Investment Fund (PIF). It marks the conglomerate's 11th major deal in the last two months. Here's all about it.
On Thursday, Saudi Arabia's PIF, one of the world's largest sovereign wealth funds, confirmed that it will be investing Rs. 11,367 crore in Jio Platforms for a 2.32% stake. The investment values the Indian company 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 several foreign firms.
With this, the total capital secured by Jio Platforms in the last two months has gone up to Rs. 1,15,693.95 crore ($15.2 billion). The company has sold a combined stake of 24.71% to ten foreign investors, including Facebook, General Atlantic, TPG, KKR, Silver Lake (twice), L Catterton, Vista Equity Partners, Abu Dhabi Investment Authority, Mubadala Investment Company, and now PIF.
"We are delighted to be investing in an innovative business which is at the forefront of the transformation of the technology sector in India," said Yasir Al-Rumayyan, Governor of PIF, following the investment. He added, "We believe that the potential of the Indian digital economy is very exciting and that Jio Platforms provides us with an excellent opportunity to gain access to that growth."
Jio Platforms dominates India's digital space; the company's telecom business, Jio Infocomm, debuted three-and-a-half years ago, and in such a short span, it has become the largest in the country with 388 million subscribers. Beyond that, Jio Platforms also holds Reliance's home broadband business Jio Fiber, feature phone business, music streaming service JioSaavn, on-demand live television service, a payments service, among other things.
"From Oil Economy, this relationship is now moving to strengthen India's New Oil (Data-driven) Economy, as is evident from PIF's investment into Jio Platforms. I have greatly admired the defining role PIF has played in driving the economic transformation of the Kingdom of Saudi Arabia."
These investments are widely expected to be utilized towards fulfilling Ambani's goal of clearing Reliance Industries' net debt of 1.61 lakh crore. The target is slated to be achieved by March 2021, but going by the company's current pace, experts believe the dues will be cleared by December itself. Notably, the target of raising Rs. 1.04 lakh crore by June has already been achieved.