Saudi Arabia’s PIF, one of the world’s largest sovereign wealth funds, will invest Rs 11,367 crore for 2.32 percent of Jio Platforms, a historic eleventh investment in the Reliance Industries (RIL) digital unit in nine weeks.
RIL, the oil-to-retail-to-telecom conglomerate, has now shed 24.7 percent stake in Jio and raised Rs 115,693.95 crore from some of the world’s top technology investors. To put this in context, the Indian startup ecosystem raised around Rs 110,650 crore in 2019, as per data by research firm Tracxn.
Jio, which runs movie, news and music apps as well as the telecom enterprise Jio Infocomm, has attracted the largest continuous fundraising by a company anywhere in the world.
The investment by PIF, estimated to own combined assets of nearly $400 billion, in Jio Platforms is at an equity valuation of Rs 4.91 lakh crore and an enterprise valuation of Rs 5.16 lakh crore. It comes close on the heels of investments by private equity giants L Catterton and TPG.
Historic fundraising deals
The series of investments in Jio was led by a 9.99 percent stake sale to Facebook Inc for Rs 43,574 crore on April 22.
Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said, “We at Reliance have enjoyed a long and fruitful relationship with the Kingdom of Saudi Arabia for many decades. From Oil Economy, this relationship is now moving to strengthen India’s New Oil (Data-driven) Economy, as is evident from PIF’s investment into Jio Platforms. I have greatly admired the defining role PIF has played in driving the economic transformation of the Kingdom of Saudi Arabia. I welcome PIF as a valued partner in Jio Platforms and look forward to their sustained support and guidance as we take ambitious steps to accelerate India’s digital transformation for enriching and empowering the lives of 1.3 billion Indians.”
His Excellency Yasir Al-Rumayyan, Governor of PIF, commented: “We are delighted to be investing in an innovative business which is at the forefront of the transformation of the technology sector in India. We believe that the potential of the Indian digital economy is very exciting and that Jio Platforms provides us with an excellent opportunity to gain access to that growth. This investment will also enable us to generate significant long-term commercial returns for the benefit of Saudi Arabia’s economy and our country’s citizens, in line with our mandate to safeguard and grow the national wealth of the Kingdom.”
The transaction is subject to Indian regulatory and other customary approvals.
Jio Platforms is a next-generation technology platform focused on providing high-quality and affordable digital services across India, with nearly 400 million subscribers. Jio Platforms has made significant investments across its digital ecosystem, powered by leading technologies spanning broadband connectivity, smart devices, cloud and edge computing, big data analytics, artificial intelligence, Internet of Things, augmented and mixed reality and blockchain.
What is PIF?
PIF, founded in 1971, is the sovereign wealth fund of Saudi Arabia. It was founded for the purpose of investing funds on behalf of the Government of Saudi Arabia. PIF is developing a portfolio of high quality domestic and international investments diversified across sectors, geographies and asset classes.
PIF operates through six investment pools comprising local and global investments in line with its objectives to actively invest over the long term to maximize sustainable returns, be the investment partner of choice for global opportunities, and enable the economic development and diversification of the Saudi economy.PIF aims to be a global investment powerhouse and the world’s most impactful investor, enabling the creation of new sectors and opportunities that will shape the future global economy, while driving the economic transformation of Saudi Arabia.