Foreign Investments | Jio Strikes Deal Worth Rs 11,367 Cr with KKR

Private equity firm KKR is set to invest Rs 11367 crore in Jio.

The nationwide lockdown phase is proving to be a blessing in disguise for Reliance Industries Limited (RIL) and Jio Platforms Limited. Reliance Industries Limited (RIL) announced today that private equity firm KKR is ready to invest Rs 11,367 Cr in Jio’s Platform for a 2.32 per cent stake. This is the fifth major deal in a month by the RIL and its sister concerns. This would be KKR’s largest investments in Asia.

Major deal of RIL from April 22 to May 2

This translates to Jio platform raising Rs 78,562 crore from five investors – Facebook, Silver Lake, Vista Equity, General Atlantic and KKR in one month.

Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said: “I am delighted to welcome KKR, one of the world’s most respected financial investors, as a valued partner in our onward march to growing and transforming the Indian digital ecosystem for the benefit of all Indians.”

Date Investor Deal in crore Stake
April 22 Facebook 43,574 9.99%
May 3 Silver Lake 5,656 1.15%
May 8 Vista Equity 11,367 2.32%
May 17 General Atlantic 6,598 1.34%
May 22 KKR 11,367 2.32%

US social media giant Facebook, a familiar name all over the world is partnering with Reliance Jio to create business opportunities in India. Fb is investing over Rs 43,574 crores in the Indian telecom giant Jio, a unit of Reliance Industries Limited (RIL). The deal between the two companies helped to a sharp jump of RIL’s shares over 8 per cent on Wednesday.

Facebook turns Jio’s largest minority shareholder

With the investment, Facebook has purchased a 9.99% stake in Reliance Jio. With this deal, Facebook would now be Reliance Jio’s biggest minority shareholder. The deal between two business giants will not only help create business opportunities in India but create job opportunities also.

RIL is the biggest retail player in India

Remember Mukesh Ambani led RIL is the biggest retail player in the country. The company had made an aggressive expansion in businesses like e-commerce and grocery.

After the capital gains and income tax, the final realisation from the deal will be roughly Rs 38,000 crore, according to experts. “It will be almost the same as the investment that RIL made to create the asset, without any premium,” a tax expert said.

Advantage for Facebook

Facebook is now Reliance Jio’s biggest minority shareholder

Jio has approximately 388 million customers; the deal will provide Facebook with a chance to get a massive social media market and access to a wider audience

The deal has allowed Facebook to help people in the creation of 60 million small businesses in India.

Facebook is set to operate successfully in the growth of digital business in the country.

Maximum WhatsApp users Indians

India has the largest Facebook users than any other part of the country. There are about 400 million users of this chat service in the country. But it is set to launch a payment service.

Both companies, in separate statements, said that they would work together on some major projects that will open up commerce opportunities for people across India.

Platform set for Facebook

Facebook has got a good platform as more than 900 million people in India are using the internet. The massive increase in internet users was possible due to the launch of Reliance Jio about four years ago.

MNCs on Indian soil

Not to talk of Facebook, several multinational companies (MNCs) had collaborated with the Indian companies earlier. A liquor company of the UK Diageo, which obtained majority ownership of United Breweries, once it was run by Indian liquor baron Vijay Mallya. Etihad Airways also acquired a stake in Jet Airways.

Large presence of Chinese investors in India

Chinese investors have a tough time in the wake of the deadly COVID-19 outbreak, which was the epicentre of the virus. But some of the companies which are flourishing in India have major Chinese investments such as Big Basket, Byju’s, Delhivery, Dream 11, Flipkart, Hike, MakeMyTrip, Ola, Oyo, Paytm, Paytm Mall, PolicyBazzar, Quikr and many more.

Singapore on top in FDI in India

Singapore has regained its place as the largest source of Foreign Direct Investment (FDI) in India with an investment of USD 16.2 billion in the 2018-19 financial year.

Mauritius is on the second spot with USD 8 billion Foreign Direct Investment in 2018-19 fiscal year in India.

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Foreign Investments | Jio Strikes Deal Worth Rs 11,367 Cr with KKR
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Foreign Investments | Jio Strikes Deal Worth Rs 11,367 Cr with KKR
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Reliance Industries Limited (RIL) has announced that the private equity firm KKR is ready to invest Rs 11,367 Cr in Jio’s Platform for a 2.32 per cent stake. This would be KKR’s largest investments in Asia.
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