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General Atlantic to pick up 1.34% stake in Reliance Jio for Rs 6600 crore

This is the fourth biggest investment in Reliance Jio in the past month, after Vista Equity Partners, private equity firm Silver Lake and Facebook. 

May 18, 2020 12:50 IST
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General Atlantic, an US investment firm, has decided to invest around Rs 6600 crore in Jio Platforms for a 1.34% stake. 

The Reliance Industries Limited said in a press release on May 17, 2020 that the General Atlantic investment values Jio Platforms at an equity value of ₹4.91 lakh crore and an enterprise value of ₹5.16 lakh crore. The deal will translate into a 1.34% equity stake in Jio Platforms on a fully diluted basis.

This is the fourth biggest investment in Reliance Jio in the past month, after Vista Equity Partners, private equity firm Silver Lake and Facebook. The latest deal will take the total investment in Jio Platforms to a combined total of ₹67,194.75 crore from the four investments. 

Significance

So far, a 14.8 percent stake has been sold overall in Reliance Jio platforms. According to analysts, there may be more in the pipeline. RIL may bring down its stake in Jio further to make it a debt-free company. This will help Reliance conglomerate to reposition itself as a consumer technology company. The latest transaction is subject to regulatory and other customary approvals.

Mukesh Ambani, Chairman/ MD of RIL Statement

Mukesh Ambani, the Chairman of RIL welcomed General Atlantic as a valued partner. He stated that he has known General Atlantic for several decades and greatly admired it for its belief in India’s huge growth potential. 

Ambani reiterated that the US investment firm shares its vision of a Digital Society for India to benefit 1.3 billion Indians. He also stated that this deal will also help them leverage General Atlantic’s proven global expertise and strategic insights across 40 years of technology investing for the benefit of Jio.

Bill Ford, CEO of General Atlantic Statement

The CEO of General Atlantic said that the company shares Reliance Jio’s vision that digital connectivity has the potential to significantly accelerate the Indian economy and drive growth across the country. He reiterated that General Atlantic has a long track record of working alongside founders to scale disruptive businesses, as Jio is doing in India by leading its digital revolution.

General Atlantic 

The US private equity firm main provides capital and strategic support to boost the growth of companies. The firm was founded in 1980 as the captive investment team for Atlantic Philanthropies, a philanthropic organization founded by billionaire Charles F. Feeney. Feeney is also the co-founder of Duty-Free Shoppers Ltd.

The global private equity firm had around USD34 billion in assets under its management as of March 31. It has provided capital support to many global companies including Snapchat, Uber, Airbnb, Alibaba, Facebook, Box, ByteDance, Ant Financial and Slack.

General Atlantic’s deal with Reliance Jio is its largest till date in Asia. It has invested in other Indian companies as well in past, some of which include PNB Housing Finance, Byju’s, Mu Sigma and IIFL Wealth Management.

Investments in Reliance Jio

Besides General Atlantic, Vista Equity Partners announced that it will be picking up a 2.32% stake in Jio for ₹11,367 crore on May 8. Before that, another US private equity firm Silver Lake committed to investing around ₹5,655.75 crore for a 1.15% stake in Jio Platforms and Facebook announced that it will invest about $5.7 billion for a 9.99% stake in Reliance Jio Platforms on April 22.

Background

Reliance Jio Infocom, RIL’s telecom business is the largest in the country with more than 388 million subscribers. RIL’s other digital properties and investments such as Jio Cinema, Jio Saavn and Haaptik are housed in Jio Platforms.

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