Update 1: Abu Dhabi fund Mubadala invests $1.2 bil. in Jio Platforms as e-commerce war heats up
By Atul Ranjan
NEW DELHI, NNA- India’s leading telecom operator and digital firm Jio Platforms Ltd. has announced its sixth fundraising deal with a global partner in as many weeks.
Abu Dhabi's Mubadala Investment Co. will invest 90.93 billion rupees ($1.2 billion) for a 1.85 percent stake in the firm, which quickly became the darling of investors after Facebook Inc. took the lead to acquire a 9.99 percent stake for a massive $5.7 billion in April.
Hoping to grab a piece of the huge pie in India's booming internet business, investors which have hopped onto the bandwagon in recent weeks are private equity firms General Atlantic, Silver Lake, Vista Equity Partners, and KKR & Co Inc.
In a late night development on Friday, Silver Lake along with its co-investors announced an additional investment of 45.46 billion rupees in Jio Platforms, besides their earlier investment of over 56.5 billion rupees on May 4, bringing their aggregate investment to 102.02 billion for a 2.08 percent equity stake in Jio Platforms.
The Mubadala deal has now boosted the value of the wholly-owned subsidiary of Reliance Industries Ltd. (RIL) Indian to $65 billion.
With the latest investments by both Mubadala and Silver Lake, Jio has now raised a total of $12.29 billion after selling 20 percent stake in the last six weeks.
Mukesh Ambani, the chairman and managing director of Reliance Industries whose core businesses are in oil refining and petrochemicals, said in a media statement, “Through my longstanding ties with Abu Dhabi, I have personally seen the impact of Mubadala’s work in diversifying and globally connecting the UAE’s knowledge-based economy. We look forward to benefitting from Mubadala’s experience and insights from supporting growth journeys across the world.”
Returning the compliment, Khaldoon Al Mubarak, managing director and group chief executive of Mubadala, said, “We have seen how Jio has already transformed communications and connectivity in India, and as an investor and partner, we are committed to supporting India’s digital growth journey. With Jio’s network of investors and partners, we believe that the platform company will further the development of the digital economy.”
Mubadala, which has invested actively to advance Abu Dhabi’s diversified and globally integrated economy, manages several venture funds in the United States, Europe and Middle East.
Its portfolio spans advanced manufacturing, semiconductors, metals and mining, pharmaceutical and medical technology, renewable energy and utilities.
Meanwhile, Facebook said in a regulatory submission on Wednesday that it would complete its acquisition of 9.9 percent stake in Jio via a new entity Jaadhu Holdings LLC.
Facebook added that its WhatsApp messaging app, Jio Platforms and Reliance Retail Ltd. are proposing entering into a separate commercial arrangement.
This follows their plan to integrate Reliance Retail’s JioMart with WhatsApp services to reach out to millions of consumers and businesses in India. JioMart is a new e-commerce marketplace that connects customers with neighborhood stores and other small Indian businesses.
Indeed, eager investors are turning the online retail arena in India into a battleground because of the huge potential when millions more are expected to use digital services in the coming years.
E-commerce giant Amazon.com is reportedly in early talks to buy a stake worth at least $2 billion in Indian mobile operator Bharti Airtel. It is a keen rival of Jio, which is aggressively expanding digital services, according to a Reuters report on Thursday.
“The planned investment, if completed, would mean Amazon acquiring a roughly 5 percent stake based on the current market value of Bharti and would give India’s third-largest telecoms company a boost as it seeks to compete against the number one player Reliance Jio,” the report added.