Abu Dhabi, UAEFriday 5 June 2020

KKR to invest $1.5bn in Reliance Industries' digital unit

This is the biggest investment of the US equity firm in Asia, which has invested more than $30bn in tech companies globally

Reliance Industries' Jio Infocomm is India's biggest telco with more than 376 million subscribers. Reuters
Reliance Industries' Jio Infocomm is India's biggest telco with more than 376 million subscribers. Reuters

Private equity company KKR will invest $1.5 billion (Dh5.5bn) in Reliance Industries Jio Platforms, its biggest investment in Asia to date and bringing the amount of new funds raised by the Indian digital company this month to a massive $10bn.

Jio Platforms, which houses movie, music apps and telecoms venture Jio Infocomm, has now sold a combined stake of just over 17 per cent in five fundraising deals led by Facebook which spent $5.7bn to take 9.99 per cent stake.

The deals highlight Jio Platforms' potential to become the dominant player in India's digital economy. The telecoms unit has already decimated several rivals with cut-throat pricing, while it can count on Reliance's retail network to expand e-commerce. It is also working on connected cars, security systems and smart homes.

New York-headquartered KKR's purchase of a 2.32 per cent stake pegs Jio Platforms' equity value at roughly $65bn, making it India's second most valuable standalone tech firm after IT services company Tata Consultancy Services.

"We are investing behind Jio Platforms' impressive momentum, world-class innovation and strong leadership team," Henry Kravis, co-founder and co-chief executive of the US buyout firm, said in a statement on Friday.

The $10bn in new funds raised will also help Reliance meet its target of eliminating $21.4bn in net debt this year. The oil-to-telecoms giant, controlled by Asia's richest man Mukesh Ambani, is also selling $7bn in new shares.

Often saying "data is the new oil", Mr Ambani has sought to diversify his empire away from energy and petrochemicals, beginning in 2016 with the establishment of Jio Infocomm which is now India's biggest telecom carrier with more than 376 million subscribers.

The other recent investors were General Atlantic, Silver Lake and Vista Equity Partners.

KKR has invested more than $30bn in tech companies, including China's ByteDance and Indonesian digital payments firm GoJek.

Updated: May 22, 2020 10:54 AM



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