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Saudi joins UAE in backing Jio Platforms

Saudi Arabia etc NEW.jpg

Saudi Arabia’s Public Investment Fund (PIF) has become the 10th investor to back Reliance Industries’ Jio Platforms, taking a 2.32% equity stake for US$1.5 billion.

The stake, equal to recent investments from Vista and KKR, is higher than what the UAE’s Abu Dhabi Investment Fund and Mubadala individually put into the company (see table).

Two days ago, US private equity firm L Catterton confirmed it had taken a 0.39% stake in Jio Platforms for $250 million.

In a statement Jio said: “With the addition of PIF’s investment, Jio Platforms has established partnerships with a marquee set of global financial investors, who will contribute to establishing the digital society vision for India.”

Chairman and MD Mukesh Ambani, said, “We at Reliance have enjoyed a long and fruitful relationship with the Kingdom of Saudi Arabia for many decades. From oil economy, this relationship is now moving to strengthen India’s new oil (data-driven) economy, as is evident from PIF’s investment into Jio Platforms.

“I have greatly admired the defining role PIF has played in driving the economic transformation of the Kingdom of Saudi Arabia. I welcome PIF as a valued partner in Jio Platforms and look forward to their sustained support and guidance as we take ambitious steps to accelerate India’s digital transformation for enriching and empowering the lives of 1.3 billion Indians.”

Investor

Stake

US dollar value of investment at time of confirmation

Facebook

9.99%

$5.7 billion

Silver Lake

1.5%

$746.8 million

Vista

2.32%

$1.5 billion

General Atlantic

1.34%

$870 million

KKR (Asia division)

2.32%

$1.5 billion

Abu Dhabi Investment Authority

1.16%

$750 million

Mubadala

1.85%

$1.2 billion

TPG

0.93%

$600 million

 L Catterton

0.39%

$250 million

PIF

2.32%

$1.5 billion

 

Part of the Saudi Vision 2030, the $325 billion PIF is billed as the “engine behind economic diversity”. It is one of a number of strategies implemented to diversify the Saudi economy from oil and increase private sector GDP contributions from 40% to 65%, as contributions from oil decline.

Vision 2030 predicted this would then raise the share of non-oil exports towards GDP from 16% to 50% and reduce unemployment from 11.6% to 7%.

Many plans are now being revised due to the economic impact of Covid-19 and the most recent disruption to oil prices, however PIF has announced a series of investments over the course of the crisis, including a 5.7% stake in Live Nation for $500 million and a 7.3% stake in cruiseline Carnival.

In May, the Financial Times reported that an investor group led by PIF has agreed to buy Newcastle football Club for £300 million.

When Vision 2030 was unveiled in 2016, specific projections for PIF stated it would hold $2 trillion in diversified global assets by the end of this decade.

Yasir Al-Rumayyan, governor of PIF, said: “We are delighted to be investing in an innovative business which is at the forefront of the transformation of the technology sector in India. We believe that the potential of the Indian digital economy is very exciting and that Jio Platforms provides us with an excellent opportunity to gain access to that growth.

“This investment will also enable us to generate significant long-term commercial returns for the benefit of Saudi Arabia’s economy and our country’s citizens, in line with our mandate to safeguard and grow the national wealth of the Kingdom.”

 

 

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