Asia’s richest man Mukesh Ambani is on a roll having struck four big investment deals in four weeks during the ongoing lockdown period. First, it was Facebook-Jio deal– an investment of 5.7 billion dollars by Facebook which brought billions of dollars in the Mukesh Ambani-led RIL’s shares that grabbed eyeballs, and equity firms have turned bullish on the Mukesh Ambani-led conglomerate ever since.
Earlier this month, two private equity firms- Vista Equity Partners and California-based Silver Lake Partners announced decisions to invest heavily in Reliance Jio, the telecom and digital unit of the Reliance Industries Ltd. and now another American private equity firm, General Atlantic is rooting for Reliance Jio.
On Sunday, the RIL said that the New York-based equity firm will invest Rs 6,598.38 crore in Jio platforms, taking the net value of investments that have poured in for the digital unit of the Mukesh Ambani-led conglomerate in little less than four weeks starting April 22 to Rs 67,194.75.
The Mumbai-based RIL has said that the General Atlantic will buy 1.34 per cent stake in Reliance Jio and the investment gives Jio Rs 4.91 lakh crore and Rs. 5.16 lakh crore.
Equity firms investing in a platform is a big endorsement of its future plans, especially when it is a leading growth equity firm like General Atlantic with 40 years of experience of investing technology, consumer, financial services and healthcare sectors.
General Atlantic’s investment in the Jio platforms is however its biggest in Asia showing how deeply it is rooting for Reliance Jio in a huge vindication for its future plans.
The RIL in its statement too underscored its significance and said, “As an integrated team operating under a global investment platform across 14 locations, General Atlantic invests behind themes that are driven by innovation and entrepreneurship and supported by long-term secular growth.”
The growth equity firm is also speaking about Reliance Jio’s immense promise, and Bill Ford, Chief Executive Officer of General Atlantic, said, “As long-term backers of global technology leaders and visionary entrepreneurs, we could not be more excited about investing in Jio. We share Mukesh’s conviction that digital connectivity has the potential to significantly accelerate the Indian economy and drive growth across the country. General Atlantic has a long track record working alongside founders to scale disruptive businesses, as Jio is doing at the forefront of the digital revolution in India.”
The American equity firms are impressed with Reliance Jio’s amazing growth story- a telecom player that entered the market as late as 2016 and literally took its competitors by surprise with a digital revolution. Today, Reliance Jio has grown into a telecom leader while other telecom majors are in a bad shape following the Supreme Court ruling on Adjusted Gross Revenue (AGR).
Reliance Jio’s future plans too are ambitious, which is why American equity firms cannot afford to ignore it, as with the Facebook-Jio deal it can strongly push Jio Mart, viz. Jio’s new commerce platform to connect with 3 crore Kirana (retail stores) in the country. The deal empowers Jio Mart to connect with the retail stores via Facebook’s messaging platform- Whatsapp which could be a game-changing innovation giving Jio Mart an edge over other e-commerce platforms like Amazon and Flipkart.
Jio has also been locking horns with China’s 5G tech major, Huawei having decided to roll out indigenous technology instead of depending on foreign firms. Reliance Jio is India’s undisputed telecom leader and with such plans it is in good shape to also emerge as India’s first internet giant.
In 2018, Flipkart was purchased by Walmart in a 16 billion US Dollars deal, and thus India doesn’t really have an e-commerce/ internet giant. But Jio Platforms is looking to push its presence into all digital avenues including the television industry and broadband services. It also has plans for a digital platform to connect with retailers.
India is a prolific internet market, and Reliance Jio leads it with a huge margin. As Reliance Jio becomes the digital king in India, it will be hard for the world to ignore it, which is why American equity firms are reposing their faith and money in it. Mukesh Ambani is thus set to give India its first internet giant.