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Jio Platforms raises $1.2 bn from Abu Dhabi state fund, its 6th deal in 6 weeks

Reliance Industries on Friday announced that Abu Dhabi sovereign fund Mubadala Investment Company will buy 1.85% stake in its digital unit, Jio Platforms, for $1.21 billion. This investment is the largest in an Indian firm by Mubadala.

Reliance Industries Limited (RIL) on June 5 said Mubadala Investment Company, the Abu Dhabi-based sovereign investor, will invest Rs 9,093.60 crore in Jio Platforms for a 1.85 percent equity stake on a fully diluted basis.

This will be the sixth investment in RIL in quick succession, following those by social media major Facebook, private equity funds Silver Lake, Vista Equity Partners, KKR & Co Inc, and General Atlantic. 

Over the past six weeks, the digital business of Reliance Industries Ltd, known as Jio Platforms, has raised a striking Rs 87,655.35 from global investors for a total 19 per cent stake. 

RIL Chairman and Managing Director Mukesh Ambani said, “I am delighted that Mubadala, one of the most astute and transformational global growth investors has decided to partner us in our journey to propel India’s digital growth towards becoming a leading digital nation in the world.”

“Through my longstanding ties with Abu Dhabi, I have personally seen the impact of Mubadala’s work in diversifying and globally connecting the UAE’s knowledge-based economy. We look forward to benefitting from Mubadala’s experience and insights from supporting growth journeys across the world,” he added.

Khaldoon Al Mubarak, Managing Director and Group CEO, Mubadala Investment Company, in a statement said the company is committed to investing in, and actively working with, high growth companies which are pioneering technologies to address critical challenges and unlock new opportunities.

“We have seen how Jio has already transformed communications and connectivity in India, and as an investor and partner, we are committed to supporting India’s digital growth journey. With Jio’s network of investors and partners, we believe that the platform company will further the development of the digital economy,” he said.

The Jio Platforms investment is the largest in an Indian firm by Mubadala, which is the second-biggest state investor in Abu Dhabi after Abu Dhabi Investment Authority (ADIA), managing about $240 billion in assets.

The interest in Jio Platforms highlights its potential to become the dominant player in India’s digital economy.

Reliance Industries Limited (RIL) on May 22 announced had that private equity firm KKR will invest Rs 11,367 crore in Jio Platforms for a 2.32 per cent stake.

With the latest deal, Jio Platforms will get a combined Rs XXX crore from the six investments. The RIL unit comprises mostly its telecom business under Reliance Jio Infocomm, which is the largest in the country with more than 388 million subscribers.

Prior to this, General Atlantic on May 18 said it will buy 1.34 per cent stake in Jio Platforms for Rs 6,598.38 crore, while Vista Equity Partners said on May 8 it will be picking up a 2.32 per cent stake for Rs 11,367 crore.

U.S. private equity firm Silver Lake had on May 5 said it will invest Rs 5,655.75 crore in Jio Platforms for a 1.15 per cent stake and on April 22, Facebook said it would invest USD 5.7 billion for a 9.99 per cent stake.

RIL on Wednesday also closed a USD 7 billion rights issue, India’s largest ever, luring buyers in with a rare deferred payment offer. Proceeds from the issue, also ranked as one of the world’s largest by a non-financial company based on Dealogic data, will aid Reliance’s plan to slash net debt to zero this year.

The issue was subscribed about 1.6 times, in “a vote of confidence, by both domestic investors, foreign investors and small retail shareholders, in the intrinsic strength of the Indian Economy”, chairman and managing director Mukesh Ambani said a statement late on Wednesday.

Reliance launched the issue last month, offering existing Shareholders one new share for 15 held at a discounted price of 1,257 rupees (USD 17) a piece.

Investors could pay only a quarter of the price upfront, and the rest in two instalments until November 2021.

Also, in a first, Reliance said the partly paid up shares could be traded on stock exchanges, giving Investors a chance to buy more of the discounted issue than the entitlement and making it an attractive bet for arbitrage players.

The Shares will be allotted on June 10 and listed on the exchanges on June 12, the conglomerate has said.

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