Jio Platforms is set to raise another Rs 6,441.3 crore by selling a combined 1.32% to US private equity firms TPG and L Catterton. These are the eighth and ninth investors, respectively, to announce picking up stake in the Reliance Industries‘ (RIL) telecom and digital business in seven weeks.
While TPG is set to invest Rs 4,546.80 crore in Jio Platforms for a 0.93% stake, L Catterton will invest another Rs 1,894.50 crore to pick up 0.39% stake.
The investments peg Jio Platforms’ equity value at Rs 4.91 lakh crore and enterprise value at Rs 5.16 lakh crore. With the latest investments, parent Reliance Industries stands to get Rs 1,04,326.95 crore from the nine investors in exchange for 22.38% stake, the group said in a statement Saturday.
The funds coming from stake sales in Jio Platforms and the Rs 53,124 crore from a rights issue will help lower Reliance’s consolidated net debt significantly from Rs 1.61 lakh crore at the end of FY20. Reliance is now well placed to meet its zero net-debt target by March 2021, analysts said.
“Today, I am happy to welcome TPG as valued investors in our continued efforts towards digitally empowering the lives of Indians through the creation of a digital ecosystem. We have been impressed by TPG’s track record of investing in global technology businesses which serve hundreds of millions of consumers and small businesses, making the societies we live in better,” Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said in the statement.
The Jio Platforms unit comprises mostly its telecom business under Reliance Jio Infocomm, which is the largest in the country with more than 388 million subscribers, besides other digital properties and investments. Reliance, which is trying to transform into a consumer technology giant from an oil and petrochemicals major, has talked about building Jio Platforms into a digital entity on the lines of Alphabet and Tencent.
TPG is a leading global alternative asset firm founded in 1992 with more than $79 billion of assets under management across a wide range of asset classes, including private equity, growth equity, real estate and public equity. Its investments in global technology companies include Airbnb, Uber, and Spotify, among others.
“We are excited to partner Reliance to invest in Jio. As an investor in growth, change, and innovation for over 25 years – and with a longstanding presence in India — we are excited to play an early role in Jio’s journey as they continue to transform and advance India’s digital economy. Jio is a disruptive industry leader that is empowering small businesses and consumers across India by providing them with critical, high-quality digital services,” Jim Coulter, Co-CEO TPG, said in the statement.
“The company is bringing unmatched potential and execution capabilities to the market, setting the tone for all technology companies to come,” he added.
TPG is making the investment from its TPG Capital Asia, TPG Growth, and TPG Tech Adjacencies (TTAD) funds.
“The transaction is subject to customary conditions precedent,” RIL said in one of the statements.
Morgan Stanley acted as financial advisor to Reliance Industries and AZB & Partners and Davis Polk & Wardwell acted as legal counsels. Shardul Amarchand Mangaldas & Co. acted as legal counsel for TPG.
Morgan Stanley also acted as the financial advisor to Reliance Industries and AZB & Partners and Davis Polk & Wardwell acted as legal counsels, on the L Catterton deal.
On the investment from consumer focussed PE firm L Catterton, Ambani said, “I am delighted to welcome L Catterton as a partner in our journey to unleash the power of digital for India while providing a consumer experience that is among the best in the world. I particularly look forward to gaining from L Catterton’s invaluable experience in creating consumer-centric businesses because technology and consumer experience need to work together to propel India to achieving digital leadership”.
Founded in 1989, L Catterton has a 30-year track record of leveraging its operational expertise, deep sector insights, global network of resources, and its unique partnership with LVMH and Groupe Arnault, L Catterton has successfully invested in and helped build some of the most innovative brands at the forefront of the evolving consumer landscape, including Peloton, Vroom, ClassPass, Owndays, FabIndia, and more.
“We are strong supporters of fostering growth through product development, enhanced digital capabilities and strategic alliances. We look forward to partnering with Jio, which is uniquely positioned to execute on its vision and mission to transform the country and build a digital society for 1.3 billion Indians through its unmatched digital and technological capabilities,” Michael Chu, Global Co-CEO of L Catterton, said.
Other investors so far besides TPG and L Catterton, have been Abu Dhabi’s two largest sovereign investment arms Abu Dhabi Investment Authority and Mubadala, private equity firms Silver Lake, Vista Equity Partners, General Atlantic and KKR, and social media major Facebook, which has picked up the largest chunk of 9.99% for nearly Rs 44,000 crore.
Note: The story has been updated with information on L Catterton’s investment
Leave a Reply