Microsoft Seeks $2B Stake In India’s Jio Platforms- Report

Microsoft (MSFT) is currently negotiating an investment of up to $2 billion in Reliance Industries’ digital unit Jio Platforms, Live Mint reports, citing two people aware of the discussions.

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Jio Platforms is an Indian telecommunications company that operates a national LTE network with coverage across all 22 telecom circles with more than 388 million subscribers.

“Microsoft has been in discussions with several players in the digital payments services space. With Reliance, Microsoft is interested in buying more than a 2.5% stake in Jio Platforms,” Live Mint writes. However, there is no guarantee that the investment will go through, one of the sources added.

Only last week KKR & Co. (KKR) announced that it will inject $1.5 billion in Jio for a 2.32% stake, the company’s biggest investment in Asia. The deal valued Jio Platforms at an equity value of about $65 billion.

“Few companies have the potential to transform a country’s digital ecosystem in the way that Jio Platforms is doing in India, and potentially worldwide,” said Henry Kravis, Co-Founder and Co-CEO of KKR at the time.

This marked the 5^th investment for Jio over the past month by large corporates, including Silverlake and Facebook (FB), taking the total investment to over $10 billion. Indeed, Facebook poured $5.7 billion into Jio in April for a 9.99% stake, and the pair have since launched the JioMart online grocery service across cities in India.

In this case, Microsoft and Reliance Industries are already connected- the two struck a 10-year cloud-related deal back in 2019.“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” stated MSFT CEO Satya Nadella.

Shares in MSFT are currently trading up 15% year-to-date, and analysts believe 19% further upside potential lies ahead. In the last three months, the stock has received 22 buy ratings and just 1 hold rating, giving it a Strong Buy consensus. (See Microsoft stock analysis on TipRanks).

“While MSFT will not be immune to macro demand trends, on the whole the company’s broad product portfolio is poised to benefit from accelerating cloud demand” cheered RBC Capital’s Alex Zukin as he bumped up his price target from $196 to $200 on May 17.