Microsoft and Abu Dhabi state fund Mubadala Investment Company have separately started negotiations with the oil-retail-telecom conglomerate Reliance Industries Limited (RIL) to buy stakes in Jio Platforms. According to reports, Microsoft is looking to purchase an over 2.5% stake for around US$2 billion, while Mubadala Investment Company is looking to invest US$1 billion in Jio Platforms.
RIL had last year restructured its digital business into one consolidated wholly-owned subsidiary – Jio Platforms – which houses all digital initiatives, including applications, tech initiatives, and connectivity services like mobile and broadband under Reliance Jio and Den Networks, Hathway Cable and Datacom Ltd.
Interestingly the latest development coincides with Mukesh Ambani’s plan for an initial public offering (IPO) for Jio Platforms Ltd outside of India in the next 12-14 months. Mukesh Ambani’s youngest son Anant Ambani, 25, has also joined the board of Jio Platforms as an additional director.
Mukesh Ambani’s Jio Platforms has already received investments worth $10 billion from Facebook, KKR & Co., Silver Lake, Vista Equity Partners, and General Atlantic less than a month. Facebook’s April announcement to invest $5.7 billion for a 9.99% stake in Jio was the most substantial investment for a minority stake by any technology company globally.
The Facebook investment was followed by $750 million investment from Silver Lake, $1.5 billion from Vista Equity Partners, and $870 million from General Atlantic.
RIL had on April 30 said that Jio Platforms received interest from other global investors. The company’s V Srikanth, deputy chief financial officer, during an analyst call on April 30, said that the amount Jio Payments received from Facebook was 50% of the targeted value, implying that another a total of 20% stake sale was on the cards.
Media reports said that Microsoft has been in touch with several players in the digital payments services space, and its negotiations with Jio Platforms are in line with its broader interest in the area.
Reliance Jio Infocomm, India’s leading telecom operator with more than 388 million subscribers, and Microsoft Corp had previously entered into a 10-year strategic partnership to offer a detailed set of solutions comprising connectivity, computing, storage solutions, and other technology services and applications essential for Indian businesses.
Jio is setting up data centres in locations across India, consisting of compute, storage and networking capabilities, and Microsoft will deploy its Azure platform in these data centres to support Jio’s offerings.
“The combination of Jio’s leading connectivity and digital solutions with Azure, Azure AI, and Office 365 will bring powerful tools and platforms for compute, storage, productivity and more to millions of businesses in the country,” Satya Nadella, CEO of Microsoft had said in August 2019.
Under the partnership, both companies are also aiming to drive the adoption of technologies like data analytics, AI, cognitive services, blockchain, Internet of Things, and edge computing among small and medium enterprises to make them ready to compete and grow.