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Reliance raises USD 1.2 billion from Abu Dhabi-based sovereign fund Mubadala

Reliance has raised a total of USD 11.63 billion by selling an estimated 18.97% stake in Jio Platforms within six weeks.

Reliance Industries, India’s largest conglomerate by market capitalization, has scored another billion-dollar investment. This time, it is from Abu Dhabi-based sovereign investment firm Mubadala.

In a regulatory filing on Friday, the Mumbai-headquartered company led by Asia’s richest person Mukesh Ambani, said Mubadala will invest USD 1.2 billion (INR 9,093.60 crore) for a stake of 1.85% in Jio Platform, Reliance’s digital arm.

Mubadala, which has USD 229 billion of assets under management, invests in diverse industries such as aerospace, real estate, metals and mining, information technology (IT), healthcare, renewables, semiconductors, and petroleum, among others. It has operations in more than 50 countries. In India, it is present through its investment in Gulf Energy Maritime (GEM), one of the leading commercial product and chemical tanker companies in the Middle East.

“Through my longstanding ties with Abu Dhabi, I have personally seen the impact of Mubadala’s work in diversifying and globally connecting the UAE’s knowledge-based economy,” said Mukesh Ambani, chairman and managing director of Reliance Industries.“We look forward to benefiting from Mubadala’s experience and insights from supporting growth journeys across the world.”

This is the sixth funding that Reliance has raised in the last one and a half month. It follows the five successive investment rounds from US-based companies. These include social networking giant Facebook and private equity players Silver Lake, Vista Equity Partners, and General Atlantic, and KKR.

While Facebook acquired 9.99% for USD 5.7 billion in April, Silver Lake, Vista Equity Partners, General Atlantic, and KKR invested USD 746.7 million, USD 1.5 billion, USD 870 million, and USD 1.5 billion, respectively in Jio Platforms. Silver Lake now holds an estimated 1.15% stake in Jio Platforms, while Vista Equity and KKR, each have a 2.23% stake. Meanwhile, General Atlantic owns a 1.34% stake in Reliance’s digital arm.

With the recent investment, Reliance has raised a total of USD 11.63  billion by selling an estimated 18.97% stake in Jio Platforms within six weeks. 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 the deal with KKR, General Atlantic, and Vista Equity Partners.

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Jio Platforms is an umbrella entity under which Reliance has created an ecosystem comprising of its telecom network, devices, apps, content platforms, and services. It has been 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.

“We are committed to investing in, and actively working with, high growth companies which are pioneering technologies to address critical challenges and unlock new opportunities,” Khaldoon Al Mubarak, managing director and Group CEO, Mubadala Investment Company, said in the statement.

Mubarak said having seen “how Jio has already transformed communications and connectivity in India,” Mubadala is committed to support India’s digital growth journey.

“With Jio’s network of investors and partners, we believe that the platform company will further the development of the digital economy,” he added.