Vista to invest Rs11,367 cr in Jio platforms, two others in queue
09 May 2020
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Mukesh Ambani’s digital mega-float Jio Platforms has taken in three major investors, including technology major Facebook Inc and equity investors Silver Lakes and Vista Equity, which together brought in investments to the tune of Rs60,596.37 crore. And, according to reports, two other major investors, Saudi Arabia’s sovereign investment fund and General Atlantic are in the queue looking to onboard the new digital entity.
Vista Equity Partners will invest Rs11,367 crore into Jio Platforms, Reliance Industries Limited and Jio Platforms Limited announced on Friday, days after the Mukesh Ambani firm sealed a $5.7 billion investment deal by Facebook Inc.
This is the third major investment in the digital platform after Facebook Inc’s $5.7 billion investment and Silver Lake’s $746.8 million investment in Jio Platforms
The latest investment by Vista values Jio Platforms at an equity value of Rs4,91,000 crore and an enterprise value of Rs5,16,000 crore.
Vista’s investment will translate into a 2.32 per cent equity stake in Jio Platforms on a fully diluted basis, making Vista the largest investor in Jio Platforms behind Reliance Industries and Facebook. Jio Platforms has now raised Rs60,596.37 crore from leading technology investors in less than three weeks.
Jio Platforms, a wholly-owned subsidiary of Reliance Industries Limited, is a next-generation technology company building a digital society for India by bringing together Jio’s leading digital apps, digital ecosystems and high speed connectivity platform under one umbrella.
Reliance Jio Infocomm Limited, which provides connectivity platform to over 388 million subscribers, will continue to be a wholly-owned subsidiary of Jio Platforms.
Jio’s vision is to enable a Digital India by connecting people and businesses throughout India, especially small merchants, micro-businesses and farmers.
Jio has brought transformational changes in the Indian digital services space and propelled India on the path towards becoming a global technology leader and among the leading digital economies in the world.
Vista is a leading global investment firm focused on growing enterprise software, data and technology enabled companies that are reinventing industries and catalysing change. Vista has more than $57 billion in cumulative capital commitments and its global network of companies collectively represent the fifth largest enterprise software company in the world.
A Bloomberg report, citing sources close to the development, said private equity firm General Atlantic is in talks to invest in Reliance Industries Ltd’s Jio Platforms, which would make it the latest in a series of high-profile backers of the $65 billion Indian telecommunications provider.
The private equity firm is considering investing about $850 million to $950 million in Jio Platforms, the report said, adding that the deal could be completed this month itself.
A transaction would add to the $8 billion of investments that Jio has sealed in the past month. Facebook Inc. in April agreed to pay $5.7 billion for a 10% stake in the digital unit, while Silver Lake and Vista Equity Partners said they would invest about $2.25 billion in total in two separate transactions this week.
The latest investment reaffirms Jio as a strong tech-enterprise focused on one of the most exciting and large markets in the world and emphasises the quality of management. Vista’s investment showcases Jio as the next-generation software and platform company. It also is an endorsement of Jio’s tech capabilities and the potential of the business model even in this COVID-19 world and beyond.
The investment reaffirms Jio’s continuing attraction among global investors for its deep understanding of the Indian markets, the rapid digitisation opportunity post-COVID and its capabilities to bring cutting-edge technologies and tools such as AI, Blockchain, AR/VR and Big Data into play for all Indians.
In April, Facebook bought a 9.9 percent stake in Jio for Rs 43,574 crore. This was the social media powerhouse’s biggest investment since its $22 billion buyout of WhatsApp in 2014. On May 4, American private equity giant Silver Lake Partners purchased 1 percent of Jio Platforms for Rs 5,655.75 crore.
Commenting on the transaction with Vista, Mukesh Ambani, chairman and managing director, Reliance Industries Ltd, said he was delighted to welcome Vista, one of the world’s marquee tech investors globally as a valued partner. “Like our other partners, Vista also shares with us the same vision of continuing to grow and transform the Indian digital ecosystem for the benefit of all Indians. They believe in the transformative power of technology to be the key to an even better future for everyone.”
Commenting on the investment, Robert F Smith, founder, chairman and CEO of Vista, said, “We believe in the potential of the Digital Society that Jio is building for India. Mukesh’s vision as a global pioneer, alongside Jio’s world-class leadership team, have built a platform to scale and advance the data revolution it started. We are thrilled to join Jio Platforms to deliver exponential growth in connectivity across India, providing modern consumer, small business and enterprise software to fuel the future of one of the world’s fastest growing digital economies.”
Diverse marquee investors are becoming long-term shareholders of Jio Platforms because of a unique set of technologies and platforms under one entity. There are no similar opportunities available anywhere else globally.
Reports also said Saudi Arabia’s $320 billion sovereign wealth fund is exploring a potential investment in Reliance Industries Ltd.’s digital unit. The Public Investment Fund is considering purchasing a minority stake in Jio Platforms, the report cited sources as saying.
The string of investments from technology giants and private equity firms will go toward slashing debt at Reliance Industries, which is controlled by Mukesh Ambani, who is Asia’s richest man. The outside money also helps set a valuation for Jio, which until recently has been largely owned by the billionaire’s conglomerate.
Investors are betting on Jio’s access to India’s huge consumer market, and its potential to shake up traditional industries in the country -- from retail to education and payments -- with its technology.
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