KKR invests $ 1.5 billion in Indian platforms Reliance Jio – TechCrunch

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Mukesh Ambani’s Reliance Jio Platforms has agreed to sell 2.32% of the capital of the American company KKR in what is the fifth major agreement concluded by the first Indian telecommunications operator in as many weeks.

Friday, KKR has announced that it will invest $ 1.5 billion in India’s leading telecommunications operator, a subsidiary of the most popular Indian firm (Reliance Industries), joining other American investors Facebook, Silver Lake, Vista Equity Partners and General Atlantic who have made similar bets on Jio Platforms.

KKR’s investment, which has issued checks to approximately 20 tech companies, including ByteDance and GoJek over the past four decades, values ​​Reliance Jio Platforms at $ 65 billion.

Today’s announcement also shows the appeal of Jio Platforms, which raised $ 10.35 billion last month by selling about 17% of its stake, to foreign investors looking for a share of the second largest. Internet market of the world.

Ambani, president and CEO of the oil giant to telecommunications Reliance Industries who poured more than $ 30 billion to build the Jio platforms, said the company is eager to leverage “KKR’s global platform, industry knowledge and operational expertise to further develop Jio” .

In recent years, India has become one of the world’s biggest battlegrounds for Silicon Valley and Chinese companies looking to win over the country’s 1.3 billion people, most of whom remain smartphone-free. no internet connection.

Amazon, Google, Facebook, Microsoft, Xiaomi and TikTok’s parent company, ByteDance, among others, already count India as one of their most important foreign markets. In the past decade, nearly half a billion Indians have connected for the first time, thanks in large part to Reliance Jio, which has gathered more than 388 million subscribers.

Reliance Jio

An advertisement starring Bollywood actor Shah Rukh Khan for Reliance Jio (Image: Dhiraj Singh / Bloomberg via Getty Images)

Reliance Jio, launched in the second half of 2016, has equipped the Indian telecommunications industry with low-cost data plans and free voice calls, forcing incumbent operators such as Airtel and Vodafone to significantly revise their prices to support customers. and a lot to consolidate and exit the market.

Jio Platforms, a subsidiary of Reliance Industries, operates the telecommunications business, called Jio Infocomm, which has become the leading telecommunications operator in India.

Reliance Jio Platforms also has a multitude of digital applications and services, including the JioSaavn music streaming service (which it claims will be made public), the live TV service and the pay-per-view service, as well as smartphones and broadband businesses.

“Few companies have the potential to transform the digital ecosystem of a country like Jio Platforms does in India, and potentially around the world. Jio Platforms is a true next-generation local technology leader in India that is unmatched in its ability to provide technology solutions and services in a country experiencing a digital revolution, “said Henry Kravis, co-founder and co-general manager from KKR. in a report.

“We are investing behind Jio Platforms’ impressive momentum, world-class innovation and strong management team, and we see this historic investment as a strong indicator of KKR’s commitment to supporting leading technology companies in India and in Asia-Pacific, “he added. This is the largest investment (in terms of equity) made to date by KKR’s private equity activities in Asia.

The new capital is also expected to help Ambani, India’s wealthiest man, further consolidate his commitment to investors last year when he pledged to reduce Reliance’s net debt by about 21 billion dollars to zero by the start of 2021 – in part because of the investments he made to build Jio Platforms. Its core business – petroleum refining and petrochemicals – has been hit hard by the coronavirus epidemic. Its net profit for the quarter ended March 31 decreased by 37%.

When calling the company’s results last month, Ambani said several companies have expressed interest in buying stakes in Jio Platforms following the Facebook deal. The recent investments are also paving the way for Jio’s first IPO, which could take place within five years.

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