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Jio raises ₹5,683 crore from Abu Dhabi Investment Authority, brings total to ₹97.8K crore

In its second investment from Abu Dhabi, Jio Platforms has raised ₹5,683 crore (~US$751.7 million) from the Abu Dhabi Investment Authority (ADIA), giving the sovereign fund a 1.16% equity stake. Its previous investment from the UAE was from Mubadala, a ₹9,093.60 crore (~US$1.2 billion) investment for 1.85% equity announced just last week. Both ADIA and Mubadala are mostly state-owned investment funds, giving investors from Abu Dhabi a 3.01% stake in Jio Platforms. This continues the staggering investment demand Jio Platform has been generating over the past few weeks; the company’s investments in the last couple months alone now amount to ₹97,885.65 crore (~US$13 billion).

On June 5, Silver Lake, a Menlo Park-based investment firm, had announced, alongside Mubadala, a combined investment of ₹10,202.55 crore (US$1.34 billion) (more than half of which it announced earlier on May 4). Large investors have been lining up to invest in Jio, starting with Facebook, which chipped in ₹43,574 crore (US$5.7 billion) for a 9.9% stake.

New York based investment firm KKR & Co. Inc. announced a ₹11,367 crore (~$1.5 billion) investment in Jio Platforms, the holding company for Reliance Jio, on May 21. Before this, General Atlantic announced on May 18 that it would invest ₹6,598.38 crore (~$870 million) in Jio Platforms, which also includes Reliance’s other digital ventures.  On May 8, Jio Platforms announced a ₹11,367 crore (~US$1.5 billion) investment from Vista Equity Partners.Mubadala manages US$229 billion in funds, mainly in the aerospace and oil and petrochemicals industries. ADIA says it “invests directly in global financial markets”, and also has money in real estate, credit, and infrastructure.

In its earnings call for Q4FY20 on April 30, RIL had said that investments similar to size in Facebook were going to follow in the coming months. A key part of Jio Platforms, in addition to the Jio network, is JioMart, the grocery home delivery service that will be closely integrated with Facebook’s WhatsApp, which 400 million people have installed in India.

  • Increased focus on telecom and B2C: Reliance is preparing to sell off a significant oil and petrochemicals wing, worth tens of billions of dollars. Now that telecom and home delivery are among the few industries which are likely to survive the throes of this pandemic, the company’s focus on telecom is likely to intensify. With its own $21 billion infusion into Jio Platforms and Facebook’s capital, the company is likely to double down on these businesses. Its existing retail network and size will help it scale.
  • Will Jio deliver? As JioMart pilots in Maharashtra, Jio’s integration with WhatsApp will determine the shape of things to come. Under normal circumstances, JioMart would be a calculated risk with all the competition in place. But Jio’s resources and a sharp uptick in preference for home delivered groceries should give Jio a solid opportunity to make a mark here, and make it fast; during its earnings call, the company said it would accelerate JioMart’s deployment in the coming months. What’s more, groceries have driven Reliance Retail’s growth in the past quarter (with a year-over-year growth of 107%), so home delivery should boost those revenues further.

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