Funding by General Atlantic, Facebook, others to position Jio as tech player: Analysts

Recent investments by Facebook, General Atlantic, Vista and Silver Lake will re-position Jio as a major tech player rather than just a telecom service provider, analysts said on Monday.

Reliance Industries has announced the sale of 1.34 percent stake in its digital unit to global equity firm General Atlantic for Rs 6,598.38 crore. The latest deal follows on the footsteps of other marquee investors: Facebook on April 22 announced it is picking up 9.99 percent stake in Jio Platforms, the firm that houses Reliance Jio, for Rs 43,574 crore.

Within days of that deal, Silver Lake, the world’s largest tech investor, bought a 1.15 percent stake in Jio Platforms for Rs 5,665.75 crore, and on May 8, the US-based Vista Equity Partners bought 2.32 percent stake in Jio Platforms for Rs 11,367 crore.

In a note on Monday, CLSA said the “investments position Jio as a growing technology player”.

“These investments by General Atlantic, Vista, Silver Lake and Facebook should reposition Jio as a major tech player rather than just a telecom service provider. Jio Platforms houses RIL’s digital business (telecom, Jio’s apps, digital investments and tech capabilities),” it said.

In a separate note, Centrum said that the “investments are racking up” and that investors bring diverse but complementary skill sets to Jio.

“With Facebook’s core competence of mapping a very large user base’s behaviour down to the last life decision they took and leveraging that to create a more targeted product/app offering, the experience of Vista in developing and helping grow start-ups who have specialised enterprise offerings in diverse business segments and of course the more traditional growth equity players Silver Lake and General Atlantic (investors in Twitter, Alibaba, Uber, Airbnb among others),” it observed.

In the last 6-12 months, Reliance Industries has repeatedly laid out its gameplan for Jio, that is creating an all-encompassing digital platform to rival the best in the business, spanning mobility, enterprise, content and B2B (business to business) and B2C (business to consumer) e-commerce solutions, it said.

“The natural objective of creating this is also to aspire to the lofty valuations of the peer set Jio wants to be compared with — the likes of Alphabet…Tencent…and partner/investor Facebook… We believe the partnerships/investments bring a series of highly credible and extremely useful partnerships to the fore and will help achieve this objective for Jio,” Centrum added in its latest note.

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