Abu Dhabi, UAEMonday 28 September 2020

Abu Dhabi Investment Authority takes Dh2.76bn stake in Reliance Industries' Jio Platforms

Sovereign fund becomes the latest backer of Mukesh Ambani's digital platform, which has amassed 388 million customers in four years

A woman checks her mobile phone as she walks past a Jio mobile store in Mumbai. Reuters.    
A woman checks her mobile phone as she walks past a Jio mobile store in Mumbai. Reuters.    

The Abu Dhabi Investment Authority has become the latest global investor to take a stake in Reliance Industries' Jio Platforms, following on from Mubadala's investment announced last week.

Adia has invested 56.83 billion Indian rupees ($753.4m / Dh2.76bn) for a 1.16 per cent equity stake in Jio Platforms, bringing the total investment secured in the last seven weeks to $12.95bn.

The investment values the business at $65bn.

"Jio Platforms is at the forefront of India’s digital revolution, poised to benefit from major socioeconomic developments and the transformative effects of technology on the way people live and work," said Hamad Shahwan Aldhaheri, executive director of Adia's private equities department.

"The rapid growth of the business, which has established itself as a market leader in just four years, has been built on a strong track record of strategic execution. Our investment in Jio is a further demonstration of Adia's ability to draw on deep regional and sector expertise to invest globally in market-leading companies and alongside proven partners.”

Reliance Industries, controlled by Asia's richest man Mukesh Ambani, is India’s largest private sector company, with a consolidated turnover of $87.1bn and a net profit of $5.3bn for the year ended March 31, 2020.

It has been building Jio Platforms, which houses movie streaming, music apps and telecoms venture Jio Infocomm, for four years.

The platform already has 388 million subscribers with the ambition to create a "Digital India", bringing online services to all of the country's 1.3 billion people.

Jio Platforms has attracted investment in recent weeks from the likes of Facebook, private equity giant KKR, Mubadala, Silver Lake Capital, Vista Equity Partners and General Atlantic, selling just under 20 per cent of the company.

“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," said Mr Ambani.

"This investment is a strong endorsement of our strategy and India’s potential.”

Faceook invested $5.7bn in Jio Platforms in April for a 10 per cent stake, making it the biggest minority shareholder in the company.

The purchase is Facebook’s biggest since its 2014 acquisition of WhatsApp.

Last month, KKR announced a $1.5bn investment in the company for a 2.32 per cent stake, which is the private equity company’s biggest deal in Asia to date.

General Atlantic, the US investment company that has stakes in Airbnb and Uber, took a 1.3 per cent share of the platform in an $870 million deal in May.

The Silicon Valley private equity company Silver Lake took an estimated 1.15 per cent stake in a $750m deal, while Vista Equity Partners invested $1.5bn to take a 2.32 per cent shareholding.

Abu Dhabi's strategic investment arm Mubadala announced a $1.2bn deal to take a 1.85 per cent stake in the business on Friday.

Jio has already pushed several telecoms rivals out of business through a price war. The firm can count on Reliance's huge retail network across the country to expand into India’s e-commerce sector.

The company has spent almost $50bn – mostly borrowings – to build Jio Infocomm, leading to a net debt of more than $20bn as of March 2019.

However, Mr Ambani is looking to bring this down to zero.

Reliance is also working with banks on early preparations for a listing of Jio Platforms outside of India and the initial public offering may happen in the next 12 to 24 months, according to Bloomberg.

Adia's investment is subject to regulatory and other customary approvals, Reliance Industries said in a statement on Sunday.

Updated: June 8, 2020 01:38 AM

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