Google will invest Rs 33,737 crore for a 7.7 percent stake in Jio Platforms Limited, becoming the latest A-list investor in the digital unit of Reliance Industries (RIL).
This investment by Google values Jio Platforms at an equity value of ₹ 4.36 lakh crore. Google’s investment will translate into a 7.73% equity stake in Jio Platforms on a fully diluted basis.
The deal with Jio, which runs the telecom enterprise Jio Infocomm, India’s biggest, as well as movie, news and music apps, is not just a financial but also a strategic investment by the internet giant. Google has joined Facebook Inc, Intel Corp and Qualcomm as strategic partners in Jio.
Speaking about the investment Ambani said, " Google has empowered millions of Indians to access helpful information and, like Jio, is a force for change and innovation. We welcome Google onboard and are excited about our partnership for what it can deliver to Indians, from universalising Internet usage to deepening the new digital economy and providing a prime mover to India’s economic growth. Together, we hope to play a strong facilitative role in the transformative journey of building a new, Digital India.”
Sundar Pichai, CEO of Google and Alphabet said, "“Reliance Industries, and Jio Platforms in particular, deserve a good deal of credit for India’s digital transformation. The pace and scale of digital transformation in India is hugely inspiring for us and reinforces our view that building products for India first helps us build better products for users everywhere. Google is proud to invest Rs33,737 crore into Jio. I am excited that our joint collaboration will focus on increasing access for hundreds of millions of Indians who don’t currently own a smartphone while improving the mobile experience for all."
On the contours of the partnership with Google, Mukesh Ambani, at RIL's 43rd AGM said, "The Jio-Google partnership is determined to make India 2G-mukt. We believe we can design entry-level 4G or even 5G smartphone for a fraction of its current cost. To power such a value engineered smartphone, we also need an equally value engineered smartphone operating system and such an operating System must be designed from grounds-up. Google and Jio are partnering to build just such Android-based smartphone operating system right here in India."
The investment by Google—the 14th such deal in less than 13 weeks—takes the total stake that Reliance sold in Jio Platforms to a skosh over 33 percent. Mumbai-based RIL has now raised a combined Rs 1,52,056 crore from some of the world’s leading tech investors in the largest fundraising exercise by a company anywhere in the world and during a global lockdown at that.
Jio has also attracted the six most admired technology and financial investors as well three sovereign funds. The four strategic partners besides bringing in cash are also going to play a strategic role in shaping the future of Jio.
Facebook led the investments in Jio by buying a 9.99 percent stake for Rs 43,574 crore on April 22. The oil-to-telecom conglomerate has since sold stakes in Jio to global investors such as General Atlantic, KKR, Saudi sovereign wealth fund, Abu Dhabi state fund, Saudi Arabia’s PIF, Intel and Qualcomm.
Cumulatively, RIL has raised Rs 2,12,809 crore through Rights Issue, combined investments in Jio Platforms, and investment by BP. It is in excess of our Net Debt of Rs 1,61,035 crore at the end of FY19-20.
The transaction is subject to regulatory and other customary approvals.