KKR makes its biggest investment in Asia in Reliance Jio

KKR & Co Inc will invest $1.5 billion in Reliance Industries’ Jio Platforms, its biggest investment in Asia to date and bringing the amount of new funds raised by the Indian digital company this month to a massive $10 billion.

Jio Platforms, which houses movie, music apps and telecoms venture Jio Infocomm, has now sold a combined stake of just over 17 per cent in five fundraising deals led by Facebook Inc which spent $5.7 billion to take 9.99 per cent.

The shares of Reliance Industries on Friday (22) gained over one per cent after it announced the new investment. The shares of the country's most-valued firm rose by 1.28 per cent to Rs 1,458.50 on the BSE. On the National Stock Exchange (NSE), it gained 1.16 per cent to Rs 1,458.

The deals highlight Jio Platforms’ potential to become the dominant player in India’s digital economy. The telecoms unit has already decimated several rivals with cut-throat pricing, while it can count on Reliance’s retail network to expand e-commerce. It is also working on connected cars, security systems and smart homes.

KKR’s purchase of a 2.32 per cent stake for 113.67 billion rupees, pegs Jio Platforms’ equity value at roughly $65 billion, making it India’s second most valuable standalone tech firm after IT services company Tata Consultancy Services.

“We are investing behind Jio Platforms’ impressive momentum, world-class innovation and strong leadership team,” Henry Kravis, co-founder and co-CEO of the US buyout firm, said in a statement.

The $10 billion in new funds raised will also help Reliance meet its target of eliminating $21.4 billion in net debt this year. The oil-to-telecoms giant, controlled by Asia’s richest man Mukesh Ambani, is also selling $7 billion in new shares.

Ambani has sought to diversify his empire away from energy and petrochemicals, beginning in 2016 with the establishment of Jio Infocomm which is now India’s biggest telecom carrier with more than 376 million subscribers.

The other recent investors were General Atlantic, Silver Lake and Vista Equity Partners.

KKR has invested more than $30 billion in tech companies, including China’s ByteDance and Indonesian digital payments firm GoJek.