General Atlantic joins Reliance Jio stake sale with $871 mn cheque; funding reaches $8.9 bn

Mukesh Ambani led Reliance Industries said on Sunday it is selling yet another equity slice in its Jio Platforms to a fourth investor -- General Atlantic-- for $871 million (Rs 6,598.38 crore at current exchange rates). With this, the company has raised close to $8.9 billion over the last month. 

Post the deal, New York based private equity firm General Atlantic will hold 1.34% equity stake in RIL’s digital arm Jio Platforms on a fully diluted basis, according to a statement. 

The deal values Jio Platforms at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore, which is the same as its previous transactions with Vista Equity Partners and Silver Lake. However, current equity valuation is 12.5% higher valuation compared that of the Facebook investment.

Since April 22, Jio Platforms has hauled $8.87 billion (Rs 67,194.75 crore) by selling 15.14% stake to social media giant Facebook, private equity firms Silver Lake, Vista Equity Partners and General Atlantic.  

“I have known General Atlantic for several decades and greatly admired it for its belief in India’s huge growth potential. We are excited to leverage General Atlantic’s proven global expertise and strategic insights across 40 years of technology investing for the benefit of Jio,” Mukesh Ambani, CMD of RIL said in a statement.

Founded in 1980, General Atlantic operates from 14 locations and has investments in several major companies such as Airbnb, Alibaba, Ant Financial, Box, ByteDance, Facebook, Slack, Snapchat and Uber. As on March 31, 2020, it has assets under management worth $34 billion.

“We share Mukesh’s conviction that digital connectivity has the potential to significantly accelerate the Indian economy and drive growth across the country. General Atlantic has a long track record working alongside founders to scale disruptive businesses, as Jio is doing at the forefront of the digital revolution in India,” Bill Ford, CEO of General Atlantic said. 

Jio Platforms, a wholly-owned subsidiary of RIL, operates proprietary telecom technology 4G LTE and several apps such as JioSaavan, JioTV and JioPay. 

Through Jio Platforms, RIL also operates Reliance Jio Infocomm, a telecom network with over 388 million subscribers. 

In what could be the fifth such stake sale in RIL’s telecom business, Saudi Arabia Sovereign Wealth Fund is also reportedly in talks to invest in Jio Platforms.

The fundraising spree is believed to be part of Reliance’s efforts to pare its debt, which is currently around $40 billion. According to various media reports, Reliance is also in talks with Saudi Arabian oil company Saudi Aramco, to sell a fifth of its oil and chemical refining business for roughly $15 billion. It is also set to sell a stake in its telecom tower assets to Canadian private equity firm Brookfield Asset Management for over $3 billion.