One of the biggest sovereign wealth funds of the world, the Abu Dhabi Investment Authority (ADIA) will invest Rs 5,683.5 crore in Jio Platforms. ADIA thus joins a posse of A-list global tech investors that have spent millions of dollars on this unit of Reliance Industries, as it is believed to have the potential to dominate India’s booming digital economy.
Jio is giving, in exchange, a 1.16% stake to the globally-diversified investment institution of Abu Dhabi in an unprecedented eighth investment in Jio Platforms in less than seven weeks. It marks the largest continuous fundraising action by a company anywhere in the world.
Oil-to-retail-to-telecom conglomerate RIL has now sold more than 21% stake in Jio Platforms through a series of fundraisers. It has thus raised as much as Rs 97,885.65 crore or $ 12.96 billion.
Chairman and Managing Director of Reliance Industries Mukesh Ambani 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.”
“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,” Executive Director of the Private Equities Department at ADIA Hamad Shahwan Aldhaheri said.
The deals concluded amid a global lockdown is being seen as 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.
The investment from Abu Dhabi at an equity valuation of Rs 4.91 lakh crore and enterprise valuation of Rs 5.16 lakh crore follows its counterpart Mubadala Investment Company’s buy out of 1.85% in Jio Platforms for Rs 9,093.6 crore and another investment by private equity giant Silver Lake and co-investors.
A 9.99% stake sale to Facebook Inc for Rs 43,574 crore on 22 April and investments by General Atlantic, Silver Lake (twice), Vista Equity Partners, KKR and Mubadala led the series of investments in Jio, which runs movie, news and music apps as well as the telecom company Jio Infocomm.
Jio Platforms, which boasts of a next-generation technology platform that provided high-quality and affordable digital services across India, has more than 388 million subscribers. 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, it has made significant investments across its digital ecosystem.
Estimated to have assets of nearly $700 billion, ADIA has invested in 18 companies, say Crunchbase data. The Abu Dhabi authority has been spending on Indian equities and also anchoring investment in several IPOs and fixed income. Of late, it has 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) purchased a 49% stake in the airport unit of Indian conglomerate GVK Power & Infrastructure and 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.
The Abu Dhabi authority has been investing funds on behalf of the UAE government since 1976 for primarily 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.