KKR picks up 2.32% stake in Mukesh Ambani’s Jio Platforms for Rs 11,367 cr

Jio Platforms, the digital services subsidiary of Reliance Industries (RIL) is selling a 2.32 per cent stake for Rs 11,367 crore to KKR. The transaction, announced on Friday, values Jio Platforms at an equity value of Rs 4.91 trillion and enterprise valuation of Rs 5.16 trillion. This valuation is similar to the deals announced over the last two weeks with Vista Equity Partners and General Atlantic. The cumulative investments of the five deals announced so far is Rs 78,562 crore for a 17.1 per cent stake. For KKR, which has investments in Avendus

Capital, Bharti Infratel, Coffee Day Resorts and Max Financial Services, this is its largest investment in Asia.

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The investments are expected to help RIL reduce its debt and expand its digital offerings. RIL had a gross debt of Rs 3.36 trillion at the end of the March quarter and a net debt of Rs 1.61 trillion. The stake sale in Jio Platforms, coupled with the rights issue, fibre investment trust and the Aramco deal is expected to help the company become debt free by the end of FY21.

Deepak Jasani, Head Retail Research, HDFC Securities said that a range of diverse marquee investors lining up to buy small stakes speaks volumes about the business model and promoters’ capabilities. The deals will help RIL reach debt free status soon, he added. HDFC Securities believes that RIL might stop further stake sales once the deals hit the 24.99 per cent mark over the next few weeks.

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Commenting on the deal, Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said, “We are looking forward to leveraging KKR’s global platform, industry knowledge and operational expertise to further grow Jio.”

Henry Kravis, Co-Founder and Co-CEO of KKR believes that few companies have the potential to transform a country’s digital ecosystem in the way that Jio Platforms is doing it in India.