L Catterton to invest Rs 1,894.50 crore in RIL’s Jio Platforms

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L Catterton, one of the world’s largest consumer-focused private equity firms, will pick up a 0.39% stake for Rs 1894.50 crore in Reliance Industries Limited’s digital unit Jio Platforms.

This is an unprecedented tenth investment in Jio Platforms in seven weeks since April 22 this year. The oil-to-telecoms conglomerate raised a total of Rs 64.4 billion ($847 million) from the sale of two stakes in its digital unit Jio Platforms, the group said on Saturday.

It said global investment firm TPG will also buy a 0.93% stake in Jio for Rs 4,546.80 crore ($598 million).

Controlled by India’s richest man Mukesh Ambani, Reliance has now sold just over 22% of Jio Platforms to investors including Facebook Inc.

A release by RIL said it is remarkable that the investments were done amidst a global lock-down, clearly signifying India’s digital potential and Jio’s business strategy.

“This investment values Jio Platforms at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore. L Catterton’s investment will translate into a 0.39% equity stake in Jio Platforms on a fully diluted basis,” the release said.

With this investment, Jio Platforms has raised Rs 104,326.95 crore from leading global investors including Facebook, Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala, ADIA, TPG and L Catterton since April 22.

“I am delighted to welcome L Catterton as a partner in our journey to unleash the power of digital for India while providing a consumer experience that is among the best in the world,” Mukesh Ambani, RIL’s chairperson and managing director, said.

“I particularly look forward to gaining from L Catterton’s invaluable experience in creating consumer-centric businesses because technology and consumer experience need to work together to propel India to achieving digital leadership,” he said.

L Catterton, which has a partnership with French luxury group LVMH and investment firm Groupe Arnault, concentrates on consumer-focused brands.

Michael Chu, the global co-CEO of L Catterton, said the company is looking forward to the partnering with Jio.

“We are strong supporters of fostering growth through product development, enhanced digital capabilities and strategic alliances. We look forward to partnering with Jio, which is uniquely positioned to execute on its vision and mission to transform the country and build a digital society for 1.3 billion Indians through its unmatched digital and technological capabilities,” Chu said.

Jio Platforms is a wholly-owned subsidiary of Reliance Industries which comprises its telecoms arm Jio Infocomm and its music and video streaming apps.

Jio Infocomm is India’s biggest telecoms firm by subscribers, with more than 376 million users. It has forced out several rivals and driven consolidation in the sector since entering the market in 2016 with free voice services and cut-price data.

The RIL release said Jio Platforms has made significant investments across its digital ecosystem, powered by leading technologies spanning broadband connectivity, smart devices, cloud and edge computing, big data analytics, artificial intelligence, Internet of Things, augmented and mixed reality and blockchain.

L Catterton, founded in 1989, is investment partner of choice for leading consumer-focused brands around the world, the release said.

“With a 30-year track record of leveraging its operational expertise, deep sector insights, global network of resources, and its unique partnership with LVMH and Groupe Arnault, L Catterton has successfully invested in and helped build some of the most innovative brands at the forefront of the evolving consumer landscape, including Peloton, Vroom, ClassPass, Owndays, FabIndia, and more,” it said.

The Jio Platforms deals, along with a $7 billion share sale, will help Reliance meet its target of paying off $21.4 billion of net debt by the end of the year, according to the company.

RIL is India’s largest private sector company with a consolidated turnover of Rs 659,205 crore ($87.1 billion), cash profit of Rs 71,446 crore ($9.4 billion), and net profit of Rs 39,880 crore ($5.3 billion) for the year ended March 31, 2020.