The latest KKR deal goes on to prove investors can’t take their eyes off India’s single-largest opportunity
Call it the Jio opportunity. Private equity firm KKR has joined other big global investors such as Facebook, Silver Lake Partners, Vista Equity Partners and General Atlantic to buy a slice of Jio Platforms. It has picked up a 2.32 percent stake in Jio Platforms for Rs 11,367 crore -- the private equity firm’s largest investment in Asia.
This is the fifth investment that Jio Platforms has received in the past one month as investors make a beeline to cash in on India’s single-largest opportunity that would transform the world’s second-largest population digitally. With the latest transaction, which takes total funding raised by Jio Platforms to Rs 78,562 crore, the company now has an equity value of Rs 4.91 lakh crore and enterprise value of Rs 5.16 lakh crore on a fully diluted basis.
For those new to the story, here’s a recap of what makes Jio so attractive to these global investors.
The parent’s vision is to digitally transform India that houses 1.3 billion people, or around 18 percent of the world’s population. And, the company has demonstrated its capabilities in the three and half years since launch. In 2016 when Jio entered the market, mobile telephony in India was primarily used for voice, especially across non-metro areas, despite the fact that mobile technology came to India in mid 1990s.
With its vision of building a Digital Society, Jio brought down the cost of data to the cheapest in the world, while voice became free. And, within no time, about a third of the country’s population living across smaller cities and rural areas, had access to mobile Internet which changed the way they now communicate and find entertainment online.
Jio has not only created vast reach, but also created a unique digital ecosystem across communication, entertainment, commerce and payments in one platform. Other value added services such as education and healthcare are just a step away. To add to that, it is now aiming to transform India’s retail industry by enabling millions of kirana stores with digital commerce. A few days after Facebook’s investment in Jio, the company launched JioMart, the phygital commerce platform that brings kirana stores to take orders and payments digitally, on WhatsApp in parts of Mumbai as a pilot project.
While every consumer-facing company desires to have a share of the wallet of consumers at the bottom of the pyramid, Jio is probably the first technology company to truly make that happen. Jio is not a consumer goods company, yet it probably has the best reach and understanding of consumers at the bottom of the pyramid in Indian diaspora. That itself is the biggest opportunity that has probably been unlocked the least.
Jio, backed by RIL’s management and 40 years of knowing the nooks and corners of India, can tap the real Bharat opportunity by bringing cutting-edge technologies and tools such as AI (artificial intelligence), Blockchain, AR/VR (augmented reality/ virtual reality), and big data into play for all Indians.
RIL chairman Mukesh Ambani had said on September 1, 2016, when he formally launched Jio at the annual general meeting of RIL that the company’s decision to invest in telecommunication and technology was because of the “opportunity to transform India”. The need for that transformation is more visible with the ongoing COVID-19 crisis that has forced the whole world to rethink business strategies to ensure survival. Jio with its unique platform is best placed to take advantage of the rapid digitisation opportunity, post COVID-19.
One of the reasons why marquee investors are becoming long-term shareholders of Jio Platforms is because of the unique set of technologies and platforms under one entity. There are no similar opportunities available anywhere else globally. This, coupled with the vision of transforming lives of 1.3 billion people, undoubtedly makes Jio an unmatchable opportunity that every big global investor would want to leverage.Disclaimer: Reliance Industries Ltd., which also owns Jio, is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.