Mukesh Ambani-led Reliance Industries recently announced that it has secured $752mn from the Abu Dhabi Investment Authority for its digital arm, Jio Platforms. As part of the transaction, ADIA will reportedly buy 1.16% of stake in Jio Platforms.
In a regulatory filing, Reliance said, ADIA’s investment in Jio Platforms, which comprises Reliance’s telecoms arm Jio Infocomm and its music and video streaming apps, gives the unit an enterprise value of ₹5.16trillion.
ADIA now joins a posse of A-list global investors that have spent millions of dollars on the Reliance Industries unit due to its unique potential to dominate India’s booming digital economy.
Reliance has now sold just over 21% of Jio Platforms to investors including Facebook Inc, General Atlantic, and many more, securing nearly $13billion in less than seven weeks.
Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said, “I am delighted that ADIA, with its track record of more than four decades of successful long-term value investing across the world, is partnering with Jio Platforms in its mission to take India to digital leadership and generate inclusive growth opportunities. This investment is a strong endorsement of our strategy and India’s potential.”
Earlier last week, Abu Dhabi’s state fund Mubadala Investment Co announced it would purchase a 1.85% stake in Jio Platforms for ₹90.93billion.
“The rapid growth of the (Jio) business, which has established itself as a market leader in just four years, has been built on a strong track record of strategic execution,” Hamad Shahwan Aldhaheri, Executive Director in ADIA’s private equities department, said in a statement.
With estimated assets of nearly $700 billion, ADIA is one of the world’s biggest sovereign wealth funds. The fund is chaired by the President of the United Arab Emirates, Sheikh Khalifa bin Zayed al-Nahyan, while its deputy Chairman is Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed al-Nahyan.
With more than 376million users, Jio Infocomm is India’s biggest telecoms firm by subscribers. Since entering the market in 2016 with free voice service and cut-price data it has forced out several rivals and driven consolidation in the sector. Ambani has always pitched Jio as a tech company instead of a traditional mobile carrier, often saying publicly that “data is the new oil”.
Meanwhile, there have been numerous media reports about Jeff Bezos-led Amazon Inc investing in Jio’s direct rival Airtel. Following the footsteps of KKR, General Atlantic, and Silverlake, even Amazon is looking to encash on India’s booming digital market.
Jio Platforms combines all of Reliance’s digital and telecom initiatives, including Jio digital services (mobile, broadband), apps, tech capabilities (artificial intelligence, Big Data, Internet of Things, etc.,) and other investments such as in Den Networks, Hathway Cable and Datacom Ltd.
The recent selling of stakes in Jio Platforms by Mukesh Ambani is part of a broader plan. Mukesh Ambani has set a target of 2021 to make his company Reliance debt-free. The richest man in India is reportedly also looking for a foreign IPO of Jio Platforms.
