Mukesh Ambani, Asia's richest man, has lured more than $10 billion of investment for his digital platform business in a month, even as the economy struggles under the world's most stringent lockdown to prevent the spread of the coronavirus.
New York-based KKR & Co. on Friday became the latest private equity firm to invest in Jio Platforms Ltd., the telecom and digital services holding company controlled by Mr Ambani's Reliance Industries Ltd., the Mumbai-based company said in a statement. The private equity fund will pay Rs 11,370 crore ($1.5 billion) for a 2.3 per cent stake in Jio.
Mr Ambani has been selling stakes in Jio in support of a vow to bring net debt of more than $20 billion to zero at his oil, retail and telecommunications group before March 2021. The deals with U.S.-based giants from Facebook Inc. to Silver Lake and General Atlantic bolster Mr Ambani's plan to shift away from oil and petrochemicals toward faster-growing consumer businesses.
“Reliance Industries is positioning itself as a global technology company with international technology and private equity players lining up for a Jio Platforms stake,” said Sudeep Anand, head of institutional research at IDBI Capital Market Services Ltd. The sales are also “another step toward achieving a zero net-debt company by calendar year 2020,” he said.
While global giants including Amazon.com Inc. and Walmart Inc. have also made big bets on growth in India's consumer markets, the companies have faced challenges in scaling their models online in the country, where restrictions protect small retailers. Mr Ambani has vowed to build an e-commerce business that works around the barriers by recruiting so-called kirana shops as partners.
|May 22||KKR||2.30%||$1.5 billion|
|May 17||General Atlantic||1.30%||$873 million|
|May 8||Vista||2.30%||$1.5 billion|
|May 4||Silver Lake||1.15%||$753 million|
|April 22||9.99%||$5.7 billion|
The billionaire's success in drawing big, seasoned tech investors like Facebook and General Atlantic to Jio comes despite a sharp drop in economic growth caused by the pandemic and uncertainty about how much damage will be done before the deadly pathogen is under control. The willingness of investors to bear those risks underscores Mr Ambani's appeal as a determined, capable empire builder and the prospects for using Jio's roughly 40 crore wireless phone users as a springboard into digital services.
Jio Platforms combines the conglomerate's digital assets with its wireless carrier, Reliance Jio Infocomm Ltd., into a holding company aimed at becoming a top e-commerce and payments operator in the country's vast consumer market.
Started in 2016, Reliance Jio is now the country's largest wireless carrier. The operator surpassed rivals by building a nationwide 4G network, then offering free calling and data services at prices established competitors with older networks could not match without losing money.