Over the weekend, Jio Platforms crossed the Rs 1 trillion (US$13.15 billion) investment mark, with investments from TPG Capital and L Catterton. Both deals were announced on June 14. TPG invested Rs 4,546.80 crore (US$600 million) and L Catterton invested Rs 1,894.50 crore (US$250 million). Jio Platforms now has combined investments worth Rs 1.04 lakh crore, at an equity value of Rs 4.91 lakh crore (US$64.57 billion) and an enterprise value of Rs 5.16 lakh crore (US$67.83 billion).
Jio Platforms has now gotten investments from nine investors, starting with Facebook, which picked up a 9.9% stake in the company for Rs 43,574 crore (US$5.7 billion). Subsequently, the firm, which is the telco Jio’s parent company, has also received investments from Silver Lake, Vista, General Atlantic, KKR & Co. Ltd., Mubadala, Abu Dhabi Investment Authority, TPG and L Catterton.
|43,574 crore (US$5.7 billion)|
|Silver Lake (1, 2)||10,202.55 crore (US$1.34 billion)|
|Vista||11,367 crore (US$1.5 billion)|
|General Atlantic||6,598.38 crore (US$870 million)|
|KKR & Co. Ltd.||11,367 crore (US$1.5 billion)|
|Mubadala||9,093.60 crore (US$1.2 billion)|
|Abu Dhabi Investment Authority||5,683 crore (US$747 million)|
|TPG Capital||4,546.80 crore (US$600 million)|
|L Catterton||1,894.50 crore (US$250 million)|
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.