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The biggest Asia deal : KKR to invest in Reliance Jio Platforms

US based private equity giant KKR will invest Rs 11,367 crore ($ 1.5 billion) in Jio Platforms Ltd as stated by Reliance Industries Ltd. This will take the total it has raised to more than $ 10 billion for the digital unit. 

22nd May 2020Author: Poshecka Kumar

Image Courtesy : pkgtech.com

US based private equity giant KKR will invest Rs 11,367 crore ($ 1.5 billion) in Jio Platforms Ltd as stated by Reliance Industries Ltd. This will take the total it has raised to more than $ 10 billion for the digital unit.  According to a statement by Reliance, this would mean KKR holding a 2.32% equity stake in Jio platforms and would also be the largest investment by KKR in Asia. 

Jio Platforms have been valued at an enterprise value of Rs 5.16 trillion and equity value of Rs 4.91 trillion by the KKR investment.  This is similar to the valuation in investments made by the private equity firms Vista Equity, General Atlantic and Silver Lake but 12.5% higher than the level at which Facebook had invested in the platform. 

Jio Platforms had been created late last year by Reliance, led by Mukesh Ambani, the billionaire and India’s richest man to house all its digital businesses.  The platform had absorbed the $ 13.5 billion debt of its telecommunication arm, Reliance Jio Infocomm Ltd. The fundraising from the four investors will help the company trim the debt. 

What is to be noticed is that the corona virus pandemic has no where slowed down Reliance’s deal making activities over the past few months.  Even before the long list of these deals surfaced, Reliance had unveiled few of the big ticket transactions with foreign investors. 

Last year, the company announced plans to sell a 20% stake in its oil-to-chemicals business to Saudi Aramco for approximately $15 billion and also sliced out its telecom infrastructure assets, roping in Brook field, the Canadian investor to seal the biggest private equity deal ever in India worth around $ 3.7 billion. 

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