Saudi Arabia’s Public Investment Fund May Be The Latest Investor In Reliance Jio

A very late entrant in the funding game of the Indian startup ecosystem, Reliance Jio is now one of the fastest fundraiser in the ecosystem. After Facebook, Silver Lake and Vista Equity Partners, Reliance Jio may raise funds from Saudi Arabia Public Investment Fund.

A Bloomberg report citing sources said that Saudi Arabia’s $320 Bn sovereign wealth fund is exploring a potential investment in Reliance Industries Ltd.’s digital unit, Reliance Jio. The Public Investment Fund is considering purchasing a minority stake in Jio Platforms. The talks are still ongoing and may not lead to a final deal, it added.

Jio Platforms has raised close to INR 60,596.37 Cr from technology investors like Facebook, Silver Lake, and Vista in the last three weeks. Facebook acquired a 9.99% stake in Jio Platforms with its INR 43,574 Cr ($5.7 Bn) investment, whereas Silver Lake as invested INR 5,655 Cr at an equity value of INR 4.90 Lakh Cr and an enterprise value of INR 5.15 Lakh Cr. 

Vista will invest INR 11,367 Cr in Reliance Jio Platforms for a 2.32% equity stake at an equity value of INR 4.91 Lakh Cr, and an enterprise value of INR 5.16 Lakh Cr.

Reliance Industries is looking to use these investments for the digital transformation of the Indian market. The company believes that comprehensive digitisation will prove to be a vital component to revitalise the Indian economy. Jio says it wants to ensure that no individual is deprived of the “tremendous” new opportunities, employment, and businesses arising out of India’s 360-degree digital transformation.

The Public Investment Fund had its mandate broadened in 2015 by Crown Prince Mohammed bin Salman to include international investments to support economic diversification. 

The fund’s governor, Yasir Al-Rumayyan had said that the sovereign wealth fund is looking into “any opportunity” arising from the economic wreckage of the crisis. The fund expects to see “lots of opportunities,” he said, citing airlines, energy and entertainment companies as examples.

Reliance Jio Platforms, which today operates the Jio telecom business has managed to capture 52% (356 Mn) of the total 687 Mn internet subscribers in India as of September 2019.

The launch of Jio in September 2016 changed India and RIL fundamentally and perhaps permanently. From being a conglomerate largely focused on traditional sectors to a new-age tech and digital giant, Reliance Jio has also played a major role in bridging the urban-rural digital divide in the country.

Since its launch in 2016, the rural internet subscriber base (as per TRAI) in India has grown over 2.1x from 115 Mn (2016) to 247 Mn (September 2019). With the wider adoption of the internet, the total addressable market for consumer internet services had grown at an incredible pace and early movers usually tend to gain more in a market which is growing exponentially along with the government’s support.