India’s industrial conglomerate Reliance Jio has drawn a $1 billion investment from two Middle Eastern sovereign wealth funds for its digital telecommunications fiber business. Over the weekend, it was reported that Abu Dhabi Investment Authority (ADIA), which manages an estimated $828 billion in sovereign wealth, and Saudi Arabia’s Public Investment Fund (PIF), whose oil-derived assets total $382 billion, will each invest roughly $507.2 million for units of Digital Fiber Infrastructure Trust, the infrastructure investment trust (InvIT) that holds Reliance Jio’s telecom fiber assets.
Indian business media reported in early October that Jio would seek to raise about 397 billion rupees ($5.4 billion) by issuing new trust units, or shares, and taking out a loan from Reliance-affiliated firms in order to trim its debt burden and fund ongoing expansion.
The Big Long
Middle East sovereign wealth funds have continually raised their exposure to Indian telecom infrastructure assets in recent months. In June, PIF announced that it was investing $1.5 billion for a 2.3 percent equity stake in Jio Platforms, a wholly owned Reliance Industries subsidiary and India’s leading digital services platform, which has in recent months drawn billion-dollar stakes from U.S. firms including Facebook and private equity investor Silver Lake. At the time that the equity investment was announced, Saudi fund noted was “in line with PIF’s mandate of safeguarding and growing the national wealth of the Kingdom by investing in markets and sectors that drive transformative economic growth.”
At the time that deal was announced, His Excellency Yasir Al-Rumayyan, Governor of PIF commented in an official statement, “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.”
Reliance Industries Chairman and Managing Director Mukesh Ambani added, at the time, “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.”
In September, Singapore sovereign wealth fund GIC partnered with Canadian private equity investor Brookfield Infrastructure Partners LP to buy Reliance Jio’s portfolio of Indian cell towers. The deal was valued at a staggering $3.4 billion, and making Brookfield the largest private investor in India.