KKR to invest $1.5 billion in Reliance Industries' digital unit

KKR to invest $1.5 billion in Reliance Industries' digital unit

While global giants including Amazon.com Inc and Walmart Inc have also made big bets on growth in India's consumer markets, the companies have faced challenges in scaling their models online in India, where restrictions protect small retailers.

Co-Founder and Co-CEO of KKR Henry Kravis, said, "Few companies have the potential to transform a country's digital ecosystem in the way that Jio Platforms is doing in India, and potentially worldwide".

This deal with Jio Platforms is KKR's largest investment in Asia.

The deal follows Facebook picking up a 9.99 per cent stake in the firm, housing India's youngest but largest telecom company, on April 22 for Rs 43,574 crore.

And on May 17, global equity firm General Atlantic picked up 1.34 per cent stake in Jio Platforms for Rs 6,598.38 crore.

The KKR deal is at same valuation as the last announced 17 May transaction where General Atlantic paid Rs6,598 crore for a 1.34% stake. There are no similar opportunities available anywhere else globally.

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The fund has also put money into technology-driven companies like enterprise solutions provider BMC Software Inc., ByteDance Ltd., owner of the TikTok social video platform, and Indonesia-based ride-hailing and food-delivery giant GoJek.

Jio Platforms is an umbrella company that manages Reliance's digital services like Reliance Jio, Jio Fiber, MyJio, JioTV, JioCinema, Jio Mart JioNews and JioSaavn under one banner. It has invested in India since 2006.

The relationship between RIL chairman Mukesh Ambani and KKR's co-founder Henry Karvis goes back several years, as the two had discussed potential collaboration for shale gas assets in the USA in 2010. The private equity fund will pay 113.7 billion rupees for a 2.3% stake in Jio.

All the five transactions are subject to regulatory approvals, with the one with Facebook likely to undergo a tighter scrutiny given concerns over net neutrality.

Jio Platforms dominates India's digital space; within just three-and-a-half years of launch, its telecom business - Jio Infocomm - became the biggest in the country with a whopping 388 million subscribers.

"We are investing behind Jio Platforms' impressive momentum, world-class innovation and strong leadership team, and we view this landmark investment as a strong indicator of KKR's commitment to supporting leading technology companies in India and Asia Pacific", he said. In the past decade, almost half a billion Indians came online for the first time, thanks in large part to Reliance Jio, which has amassed over 388 million subscribers.

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