Jio Facebook Transaction: Singapore
Jio Facebook Transaction: Singapore
Jio Facebook Transaction: Singapore
May 2020
SINGAPORE
---- This Document is prepared Exclusively for Dr. M (BK Modi) & His Leadership Team ----
Mr Oomen Mathew, President - Network, Global Strategy and Service Development at RJio, (Director on Board of Multiple Jio Entities)
Mr. Oomen is based in US and he is serving a second stint with the group. An MS in Electrical and Telecommunications from Oklahama
State University, he too worked with Infocomm between 2002 and 2008. He also worked with Flag Telecom and with Sprint Nextel before
returning to Jio in 2011. He has over 25 years of experience and hands-on executive with the ability to strategically mash-up products and
technologies, including VR and AR, IOT, devices, applications, etc. using a cloud-based delivery model offering solutions across consumer
and enterprise. Mr. Oommen helped design a network where everything rides on data, even voice. Hence, voice consumers only use 10-
15% of the bandwidth, allowing Jio to utilize more of its network for data. He is
Mr. Kiran Mathew Thomas, President (Director on Board of Multiple Jio Entities), based in Mumbai, India
Mr. Thomas holds a Bachelor’s degree in Electronics Engineering from the Cochin University of Science and Technology, India, and holds an
MBA from the Graduate School of Business, Stanford University, USA. He joined Reliance Group in the year 1997 and was part of the
process automation group for Reliance Petroleum, during the start-up phase of Reliance’s Jamnagar refinery project. He was one of the
initial members of the Reliance Infocomm start-up team, the Reliance group’s venture in telecom. He was a member of a core team that
developed the initial business blueprint and plan for Reliance Retail. Prior to joining Reliance, he worked with Tata Unisys Limited, a
leading IT consulting firm. He is the key person for payment banks and education sector digital initiates in Jio.
Mr. Anshuman Thakur, Head - Strategy & Planning - R-Jio, based in Mumbai, India
Mr. Thakur has been an investment banker in the field of telecom and technology with Morgan Stanley, NM Rothchild and acted as a
financial consultant with Ernst & Young and Arthur Anderson during his career. He graduated in Economics from University of Delhi and
completed his MBA from IIM Ahmedabad. Thakur played a key role in two significant deals with Morgan Stanley (General Atlantic Partners
buying out the promoters’ stake in Hexaware Technologies for $260 million; and $3.5 billion merger of Tech Mahindra and Mahindra
Satyam). 3
Private & Confidential
Why Jio Stake Sale is important for Reliance ?
• Last year, Reliance said it plans to create a digital holding company for
the telecom business, apps and a few of related acquisitions.
• This company would largely be debt free, with only Rs 25,000 crore of
spectrum-related borrowings in its Telecom related Business.
• The restructuring was aimed at creating a digital ecosystem
comparable with global platforms such as Amazon, Tencent Holdings
Ltd. and Alibaba.
• A host of companies that Reliance invested in are part of Jio Platforms.
These include music streaming service JioSaavn, online education
platform Embibe, AI-powered virtual assistant Haptik.
Indian Retail
Market is
expected to
be $60 Billion
in online
retail sales.
An integration with digital ecosystem can provide substantial competitive advantage for mobile biz such as lower churn, and better
value added services with higher revenue per user.
Date Total AUM Name Shareholding Amount Invested Total Jio Value - Silverlake Investments, Vista Equity Partners (VEP), General
2nd May 50 FB 9.99% 5.70 57 Atlantic Partners (GA) and KKR follow the lead of Facebook with
8th May 40 Silverlake 1.15% 0.75 65 some premium and takes the Overall investments into Jio
17th May 57 VEP 2.32% 1.50 65 Platform up to ~USD 10 Billion.
17th May 35 GA 1.34% 0.87 65
22nd May 148 KKR 2.32% 1.50 65 - After the latest sale, Reliance retains 83% of Jio Platforms and
facebook as well as other investors own 17%.
All Figures in USD Billions
Current Shareholding - Few other large institutional investors are expected to join soon
like Mobadala, PIF, CPPIB etc.
Henry Kravis, Co-Founder and Co-CEO of KKR, said, “Few companies have the potential to
transform a country’s digital ecosystem in the way that Jio Platforms is doing in India, and
FB potentially worldwide. Jio Platforms is a true homegrown next-generation technology
leader in India that is unmatched in its ability to deliver technology solutions and services
Silverlake to a country that is experiencing a digital revolution. We are investing behind Jio
Platforms’ impressive momentum, world-class innovation and strong leadership team,
VEP and we view this landmark investment as a strong indicator of KKR’s commitment to
supporting leading technology companies in India and Asia Pacific.”
GA
KKR
Reliance
Thus, we believe that current value for Jio Platforms' Digital piece is
more of a Startup Valuation, where value primarily originates from the
high potential of future market share of the firm, rather than existing Average of FY2022 EBIDTA by Top Analysts in the Market 48769
operations and earnings. Multiple as per Suggested by next best Alternative Similar Business (Bharti Airtel) ~9x-10x
Implied value of Jio Telecom Business 487690
Source : Mckinsey Global Institute, Report : Digital India: Technology to transform a connected nation
We believe that Reliance Jio Platforms derives its premium valuation from :
1. Tremendously High Growth Prospects : R-Jio grabbed ~400 Million of overall ~1.2 Billion telecom users in India with in last 4 years. Telecom
industry consolidated from 13 to 3 only players in recent times, and probably soon it will convert into a duopoly (Bharti & R-Jio). The Company
also solved major bottlenecks for internet penetration a) High Speed Internet b) Geographical Coverage c) Affordable Smartphones (Jio Phones).
2. Strong Relations with Political Leadership in the Country : Reliance Group has always maneuvered its ways from difficult Indian Systems
• India’s digital consumer base is the second largest in the world and growing at the second-fastest rate amongst major economies.
India’s inclusive digital model is narrowing the digital divide within the country and bringing benefits of technology to all segments of
people.
• Half the potential economic value of $1 trillion in 2025 could come from new digital ecosystems in diverse sectors, including
financial services, agriculture, healthcare, logistics, jobs and skills market, e-governance and other areas.
Source : Ministry of Information & Technology, Government of India (Report - 2019) Private & Confidential 16
Is this a real Opportunity ?
Yes, Opportunity is REAL as data in Mr. Ambani has said privately, that his vision for Jio Platforms is to create a Company
previous slides suggest that India is that encompasses a telecommunications firm like Verizon Communications, a service
like Google, a digital payments company like PayPal Holdings Inc. and a digital content
going to be soon, one of the Largest provider such as Netflix Inc.
Digital Markets.
Private equity firms are sitting on a record $388 billion of dry powder in Asia. (As per News Agency Deal Street Asia)
Looking at all the established Digital Ecosystems and a few prospects above.
Even if R-Jio can just onboard its existing 400 Mill customers in India, It can
very well achieve a substantial Value in the next 4/5 Years. Investors are sure
about R-Jio’s market potential, positioning as well as timing.
Thus, We may see Jio emerge as a key player to unlock the value in US
Capital markets by 2025. Same appears to be the key reason of current
rush to join the PE investment bandwagon of Jio. Reliance Jio Platforms Bandwagon
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