The L Catterton has become the ninth investors acquiring stake in Jio in eight weeks, comes hours after the three-and-half-year-old telecom network said it was selling stake worth $600 million to TPG.
Mumbai (ABC Live India): India the top Indian telecom operator Reliance Jio announced on Saturday that L Catterton, a U.S. private equity firm will invest $250 million for a 0.39% stake in Jio.
The L Catterton has become the ninth investors acquiring stake in Jio in eight weeks, comes hours after the three-and-half-year-old telecom network said it was selling stake worth $600 million to TPG.
L Catterton, a firm known to invest in consumer tech businesses, has backed dozens of young and established firms over the years including Peloton.
According to markets experts Reliance Jio has now secured more than $13.7 billion by selling about 22.3 stake to Facebook, Silver Lake, KKR, Vista Equity Partners, General Atlantic, Mubadala, Abu Dhabi Investment Authority, TPG, and L Catterton in the past eight weeks.
Michael Chu ,co-chief executive of L Catterton in statement on Reliance Jio said that, “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”.
The Telecom sector in India during COVID-19 pandemic is witnessing international investment spree as media reports suggest that Amazon is considering buying stakes worth at least $2 billion in Bharti Airtel, India’s third largest telecom operator and search engine giant Google is also has held talks for a similar deal in Vodafone Idea, the second largest telecom operator.
Robert Andrew, Senior ABC Researcher said that, “Though Reliance Jio has not disclosed why it is raising so much money by selling its stakes to above mentioned nine global investors but increasing debt of $21 billion on Reliance was one of the reasons which urgently forced it to sell its stake in quest to settle it debt liability.”
It is worthy to inform that Mukesh Ambani led Reliance had no debt liability in years 2012, but the company stared to take debt once it decided to enter the telecommunications market.
Wikipedia says Jio soft launched on 27 December 2015 with a beta for partners and employees, and became publicly available on 5 September 2016. As of 31 December 2019, it is the largest mobile network operator in India and the third largest mobile network operator in the world with over 387.5 million subscribers.
