Jio Platforms Sells Rs 5,684-Crore Stake To Abu Dhabi Investment Authority
Reliance Industries Ltd. added to the lineup of marquee investors piling into its technology asset with a Rs 5,683.5-crore investment by Abu Dhabi Investment Authority.
The sovereign wealth fund owned by the Emirate of Abu Dhabi will subscribe to fresh shares equivalent to a 1.16% stake in Jio Platforms Ltd., according to a company statement. The deal pegs the unit’s equity value at Rs 4.91 lakh crore and enterprise value at Rs 5.16 lakh crore.
Abu Dhabi Investment Authority—which has been prudently investing funds on behalf of the Government of Abu Dhabi since 1976 and manages a global investment portfolio diversified across more than two dozen asset classes and sub-categories—is the seventh investor in less than two months to bet on the subsidiary of Reliance Industries.
The valuations are similar to at which Facebook Inc, private equity firms Silver Lake, Vista Equity Partners and KKR & Co., growth equity firm General Atlantic and Abu Dhabi’s Mubadala invested in Jio Platforms, controlled by Asia’s richest man.
Jio Platforms has now raised Rs 97,800 crore by divesting almost 21.1% stake. The string of investments will go toward Mukesh Ambani’s stated goal of slashing net debt to zero at his oil-to-telecom conglomerate.
Reliance Industries had earlier announced plans to restructure its telecom and digital business by consolidating the ownership of its platform apps/AI/cloud initiatives into a separate 100% subsidiary, Jio Platforms.
The restructuring was aimed at housing the digital assets within a debt-free entity and making the new entity comparable with global platforms such as Alphabet Inc., Tencent Holdings and Alibaba Group Holding Ltd., among others, which are largely debt-free and have created large digital ecosystems.
Ambani has been spending billions of dollars to shape his online retail and telecom businesses in India. His conglomerate has also been increasingly reliant on the newer consumer units over the past few quarters to hold up its earnings when the legacy businesses face pressure. The newer businesses, including telecommunications and retail, are likely to contribute 50% of Reliance Industries’ earning in a few years from about 32% now, Ambani had said during the company 42nd annual general meeting in August last year.