Mukesh Ambani | Pankaj Nangia/Bloomberg
Mukesh Ambani | Pankaj Nangia | Bloomberg
Text Size:

Mumbai: Mukesh Ambani, Asia’s richest man, has lured more than $10 billion of investment for his India-based digital platform business in a month, even as the economy struggles under the world’s most stringent lockdown to prevent the spread of the coronavirus.

New York-based KKR & Co. on Friday became the latest private equity firm to invest in Jio Platforms Ltd., the telecom and digital services holding company controlled by Ambani’s Reliance Industries Ltd., the Mumbai-based company said in a statement. The private equity fund will pay Rs 113.7 billion ($1.5 billion) for a 2.3% stake in Jio.

Ambani has been selling stakes in Jio in support of a vow to bring net debt of more than $20 billion to zero at his oil, retail and telecommunications group before March 2021. The deals with U.S.-based giants from Facebook Inc. to Silver Lake and General Atlantic bolster Ambani’s plan to shift away from oil and petrochemicals toward faster-growing consumer businesses.

“Reliance Industries is positioning itself as a global technology company with international technology and private equity players lining up for a Jio Platforms stake,” said Sudeep Anand, head of institutional research at IDBI Capital Market Services Ltd. The sales are also “another step toward achieving a zero net-debt company by calender year 2020,” he said.

While global giants including Amazon.com Inc. and Walmart Inc. have also made big bets on growth in India’s consumer markets, the companies have faced challenges in scaling their models online in India, where restrictions protect small retailers. Ambani has vowed to build an e-commerce business that works around the barriers by recruiting so-called kirana shops as partners.

Date Buyer Stake Price
May 22 KKR 2.3% $1.5 billion
May 17 General Atlantic 1.3% $873 million
May 8 Vista 2.3% $1.5 billion
May 4 Silver Lake 1.15% $753 million
April 22 Facebook 9.99% $5.7 billion

KKR said Friday its investment in Jio is it’s largest in Asia and that Ambani’s goals played a big role in a quick decision.


Also read: Mukesh Ambani is a man on a mission and even a pandemic or lockdown can’t stop him

We are deeply grateful to our readers & viewers for their time, trust and subscriptions.

Quality journalism is expensive and needs readers to pay for it. Your support will define our work and ThePrint’s future.

SUBSCRIBE NOW


“The business model is scalable to meet the demand of aspiring Indians,” Sanjay Nayar, head of KKR’s Indian business, said in an interview, adding that the PE firm completed the deal in 10 days. “We invested in Mukesh Ambani’s entrepreneurial vision backed by a world class management.”

The fund has also put money into technology-driven companies like enterprise solutions provider BMC Software Inc., ByteDance Ltd., owner of the TikTok social video platform, and Indonesia-based ride-hailing and food-delivery giant GoJek.

Ambani’s success in drawing big, seasoned tech investors to Jio comes despite a sharp drop in economic growth caused by the pandemic and uncertainty about how much damage will be done before the deadly pathogen is under control. The willingness of investors to bear those risks underscores Ambani’s appeal as a determined, capable empire builder and the prospects for using Jio’s roughly 400 million wireless phone users as a springboard into digital services.

Jio Platforms combines the conglomerate’s digital assets with its wireless carrier, Reliance Jio Infocomm Ltd., into a holding company aimed at becoming a top e-commerce and payments operator in India’s vast consumer market.

Started in 2016, Reliance Jio is now India’s largest wireless carrier. The operator stormed past rivals by building a nationwide 4G network, then offering free calling and data services at prices established competitors with older networks could not match without losing money.-Bloomberg


Also read: There’s just no stopping Mukesh Ambani as Jio gets Rs 11,367 crore from KKR now


 

Subscribe to our channels on YouTube & Telegram

News media is in a crisis & only you can fix it

You are reading this because you value good, intelligent and objective journalism. We thank you for your time and your trust.

You also know that the news media is facing an unprecedented crisis. It is likely that you are also hearing of the brutal layoffs and pay-cuts hitting the industry. There are many reasons why the media’s economics is broken. But a big one is that good people are not yet paying enough for good journalism.

We have a newsroom filled with talented young reporters. We also have the country’s most robust editing and fact-checking team, finest news photographers and video professionals. We are building India’s most ambitious and energetic news platform. And we aren’t even three yet.

At ThePrint, we invest in quality journalists. We pay them fairly and on time even in this difficult period. As you may have noticed, we do not flinch from spending whatever it takes to make sure our reporters reach where the story is. Our stellar coronavirus coverage is a good example. You can check some of it here.

This comes with a sizable cost. For us to continue bringing quality journalism, we need readers like you to pay for it. Because the advertising market is broken too.

If you think we deserve your support, do join us in this endeavour to strengthen fair, free, courageous, and questioning journalism, please click on the link below. Your support will define our journalism, and ThePrint’s future. It will take just a few seconds of your time.

Support Our Journalism

Share Your Views

LEAVE A REPLY

Please enter your comment!
Please enter your name here