Reeba.Zachariah@timesgroup.com
Mumbai: Intel Capital, the investment arm of US chipmaker Intel Corp, will buy a 0.39% stake in Jio Platforms for Rs 1,895 crore, becoming the 11th investor to acquire a piece of the digital company’s pie in 11 weeks. Foreign investors — such as Facebook and Saudi Arabia’s PIF — now own a quarter of Jio, after agreeing to plough Rs 1.17 lakh crore into the company amid the pandemic.
Friday’s announcement comes two weeks after Jio’s parent RIL said that PIF’s Rs 11,367-crore investment marks the end of the digital company’s current phase of induction of financial partners. The foreign investors’ interest in Jio indicates the growth potential they see in the Indian company. Since launching telecom services in 2016, Jio now counts 400 million subscribers and has branched into music & movie apps and e-commerce. On Thursday, the company launched JioMeet, a video conferencing app to take on Zoom and Google Meet.
Intel Capital has pegged Jio’s valuation at Rs 5.16 lakh crore. This is similar to the valuation assigned by other financial investors to the Indian company. It will help Jio as it plans to go public in the future. The inflow of international money into Jio comes as the pandemic disrupts business models. RIL’s core refining and petrochemicals operations have been hit by a drop in demand for oil products, but stay-at-home measures have boosted data consumption and online services for Jio. The share-sales in Jio and other fund-raise programmes have helped RIL become net-debt free, the energy-to-education enterprise said on June 19.
Intel Capital has invested about $13 billion in over 1,582 companies worldwide since its incorporation in 1991. Intel has been operating in India for more than two decades and employs thousands of people at its design facilities in Bengaluru and Hyderabad. “Jio’s focus on applying its impressive engineering capabilities to bring the power of low-cost digital services to India aligns with Intel’s purpose of delivering breakthrough technology that enriches lives. We believe digital access and data can transform business and society for the better. Through this investment, we are excited to help fuel digital transformation in India, where Intel maintains an important presence,” said Intel Capital president Wendell Brooks.
Last week, India’s anti-trust regulator approved Facebook’s acquisition of a 9.99% stake in Jio for Rs 43,574 crore.