Abu Dhabi Investment Authority (ADIA), one of the world’s biggest sovereign wealth funds, will pump Rs 5,683.5 crore into Jio Platforms joining a posse of A-list global tech investors that have spent millions of dollars on the Reliance Industries unit due to its unique potential to dominate India’s booming digital economy.
The decision by ADIA, a globally-diversified investment institution, in exchange for a 1.16 percent stake, is an unprecedented eighth investment in Jio Platforms in less than seven weeks and marks the largest continuous fundraising action by a company anywhere in the world. RIL, the oil-to-retail-to-telecom conglomerate, has now sold a little over 21 percent stake in Jio Platforms through a flurry of fundraising deals and raised as much as Rs 97,885.65 crore, or $12.96 billion.
Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said, “I am delighted that ADIA, with its track record of more than four decades of successful long-term value investing across the world, is partnering with Jio Platforms in its mission to take India to digital leadership and generate inclusive growth opportunities. This investment is a strong endorsement of our strategy and India’s potential.”
Hamad Shahwan Aldhaheri, Executive Director of the Private Equities Department at ADIA, said, “Our investment in Jio is a further demonstration of ADIA’s ability to draw on deep regional and sector expertise to invest globally in market leading companies and alongside proven partners.”
Series of deals
Significantly, all the deals were concluded amid a global lockdown, a testament to India’s huge digital potential and a strong endorsement of Jio’s formidable strategy, tech capabilities, disruptive business model and secular long-term growth potential.
ADIA’s investment at an equity valuation of Rs 4.91 lakh crore and enterprise valuation of Rs 5.16 lakh crore comes close on the heels of its counterpart Mubadala Investment Company’s purchase of 1.85 percent in Jio Platforms for Rs 9,093.6 crore and a second round of investment by private equity giant Silver Lake and co-investors.
The series of investments in Jio, which runs movie, news and music apps as well as the telecom company Jio Infocomm, was led by a 9.99 percent stake sale to Facebook Inc for Rs 43,574 crore on April 22. Since then, General Atlantic, Silver Lake (twice), Vista Equity Partners, KKR and Mubadala have put their money in Jio.
Jio Platforms is a next-generation technology platform focused on providing high-quality and affordable digital services across India, with more than 388 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.
ADIA, estimated to have assets of nearly $700 billion, has invested in 18 companies, according to data from Crunchbase. ADIA has long been spending money in Indian equities, even acting as an anchor investor in several IPOs, and fixed income. In recent years, it widened its interest to assets such as infrastructure, real estate and private equities.
In April 2019, ADIA and India’s National Investment and Infrastructure Fund (NIIF) agreed to buy a 49 percent stake in the airport unit of Indian conglomerate GVK Power & Infrastructure. It invested another $495 million in renewable energy firm Greenko Energy Holdings, which runs wind, solar and hydro projects, in 2019. ADIA was also a leading investor in Bandhan Bank’s IPO.
ADIA has been investing funds on behalf of the Abu Dhabi government since 1976 with a focus on long-term value creation. It manages a global investment portfolio that is diversified across more than two dozen asset classes and sub-categories, according to its website.
Morgan Stanley acted as financial advisor to Reliance Industries and AZB & Partners, and Davis Polk & Wardwell acted as legal counsel.
(Disclaimer: Reliance Industries Ltd., which also owns Jio, is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd)