The Public Investment Fund, Saudi Arabia’s sovereign fund, will invest ₹11,367 crore (~US$1.5 billion) in Jio Platforms, Reliance Jio’s parent holding, for a 2.32% equity stake. Reliance announced the investment on Thursday. This is Jio Platforms’s third investment from the Middle East, after investments from Abu Dhabi Investment Authority and Mubadala. It is the second largest investment the company has received after Facebook’s initial investment of ₹43,574 crore (US$5.7 billion) — KKR and Vista have also invested the same amount (₹11,367 crore) in Jio. Last weekend, the company crossed ₹1 trillion in investments, and has now accumulated ₹115,693.95 crore (US$15.19 billion) in investments.
These are now all of Jio Platforms’s investors:
|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)|
|Public Investment Fund||11,367 crore (US$1.5 billion)|
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.