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Abu Dhabi Investment Authority buys 1.16% stake in Reliance’s Jio Platforms

This is Jio Platforms’ eighth fund raise in seven weeks. It has raised a total of USD 12.95 billion from leading global investors.

Investments photo. Source: Shutterstock.

Indian billionaire Mukesh Ambani has got a second powerful backer from the Middle East for his ambitious digital venture Jio Platforms.

The chairman and managing director of Reliance Industries, India’s largest conglomerate, informed regulators on Sunday that Abu Dhabi Investment Authority (ADIA), a sovereign wealth fund owned by the Government of the Emirate of Abu Dhabi, has decided to buy 1.16% stake in Reliance’s digital arm for USD 750 million (INR 5,683.50 crore).

ADIA, one of the world’s largest institutional investors, manages Emirate’s excess oil reserves and has estimated assets worth about USD 875 billion. It makes long term investments on behalf of Abu Dhabi’s government. Its three-decade-old private equity arm targets industries like financial services, healthcare, technology, and consumer products.

As a long-term investor in India, ADIA has investments in numerous asset classes including equities, fixed income, real estate, and private equity, among others, the company said in a statement. Encouraged by India’s “strong and ongoing economic growth and steadily maturing regulatory and legal systems,” the firm said it has increased activity in the country over the last few years.

“This investment is a strong endorsement of our strategy and India’s potential,” Ambani said in a statement.

The deal comes just a couple of days after Abu Dhabi’s second-largest sovereign wealth fund Mubadala got on Jio Platform’s cap table with a USD 1.2 billion investment for a 1.85% stake.

The latest investment values Jio Platform at about an equity value of USD 65 billion and an enterprise value of USD 68 billion, the same valuation that was considered for its recent deals with other investors including Mubadala, KKR, General Atlantic, and Vista Equity Partners.

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This is the eighth fund raise activity by Reliance in seven weeks. With the current investment round, Jio Platforms has raised a total of USD 12.95 billion from leading global investors including Facebook, Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala, and ADIA. In turn, it has diluted over 20% equity in Jio Platforms.

Jio Platforms is an umbrella entity under which Reliance has created an ecosystem comprising of its telecom network, devices, apps, content platforms, and services. Ambani has pitched it as a next-generation technology platform, focused on providing high quality and affordable digital services across India. The entity has thus become instrumental in selling Reliance’s vision of creating a digital India for 1.3 billion Indians, primarily focusing on millions of small merchants, micro-businesses, and farmers.

The four-year-old Reliance Jio, the telecom arm of the oil-to-retail conglomerate, is a wholly-owned subsidiary of Jio Platforms. Reliance has reportedly infused over USD 30 billion to build Jio Platforms. The funding spree is a part of Ambani’s bigger plan to eliminate Reliance’s USD 21.4 billion net debt by the end of this year.

“Jio Platforms is at the forefront of India’s digital revolution, poised to benefit from major socio-economic developments and the transformative effects of technology on the way people live and work,” Hamad Shahwan Aldhaheri, executive director of the private equities department at ADIA, said in a statement. He added that its investment in Jio further demonstrates ADIA’s ability to draw on deep regional and sector expertise to invest globally in market-leading companies.

Separately, last Friday, Silver Lake, which previously invested USD 746.7 million for a 1.15% stake in Jio Platforms said the firm and its co-investors will infuse an additional USD 601 million (INR 4,546.80 crores). This brings the aggregate investment by Silver Lake and its co-investors to USD 1.34 billion for a total equity of 2.08% equity stake.

Egon Durban, Silver Lake Co-CEO and managing partner, in a recent statement, said, “We are excited to increase our exposure and bring more of our co-investors into this opportunity, further supporting Jio Platforms in its mission to bring the power of high-quality and affordable digital services to a mass consumer and small businesses population.”