Sci-tech

Jio Platforms deal: 5 key things to know

Jio Platforms deal: 5 key things to know”

Reliance Industries Limited (RIL) and Jio Platforms Limited (Jio Platforms) on Friday announced that the US-based investment firm KKR will invest ₹11,367 crore into Jio platforms in exchange of a 2.32% equity stake.

Billionaire Mukesh Ambani's Reliance Jio Platforms has agreed to sell 2.32% stake to US equity firm KKR in what is the fifth major deal the top Indian telecom operator has secured in just as many weeks.

Post today's deal RIL stock gained as much as 1.17 percent in the morning session and then traded 0.63 percent lower to Rs 1,432 per share on the NSE. Facebook, which primed the way for a string of transactions in Jio with its investment of Rs 43,574 crore for a 9.9% stake in April, has one seat on the board of the Indian company.

The deal pegs Jio Platform's equity value at Rs 4.91 trillion and its enterprise value at Rs 5.16 trillion, the same valuation at which General Atlantic bought a stake in the unit just days earlier. So far, Jio Platforms has attracted a total investment of Rs 78,562 crore.

Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

Since inception, the firm has invested over United States dollars 30 billion (total enterprise value) in tech companies, and its technology portfolio now has more than 20 companies across the technology, media and telecom sectors.

Prior to KKR's investment, Jio platforms have received investments from Facebook, Silver Lake, Vista, General Atlantic.

More news: IOS 13.5 launched - All the details

Talking about the investment, Ambani said "KKR shares our ambitious goal of building a premier Digital Society in India".

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.

KKR, he said, has a proven track record of being a valuable partner to industry-leading franchises and has been committed to India for many years.

"We are looking forward to leveraging KKR's global platform, industry knowledge and operational expertise to further grow Jio", Ambani further added.

The deals highlight Jio Platforms' potential to become the dominant player in India's digital economy. The private equity fund will pay 113.7 billion rupees ($1.5 billion) for a 2.3% stake in Jio. It includes Reliance Jio, India's biggest mobile network with more than 388 million subscribers.

All the five transactions are subject to regulatory approvals, with the one with Facebook likely to undergo a tighter scrutiny given concerns over net neutrality.

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. Shardul Amarchand Mangaldas & Co. and Simpson Thacher & Bartlett LLP acted as legal counsel to KKR.



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