Why Jio got massive funding despite Covid lockdown

/2 min read

ADVERTISEMENT

Jio’s ability to operate with required flexibility in a regulated environment was attractive to investors, says McKinsey & Company’s Vivek Pandit.
Why Jio got massive funding despite Covid lockdown
 Credits: Alamy

Over the last 24 months there have been many divestitures from Indian companies — old economy and new economy alike — and in most cases the timing could not have been better. Reason: Investors are flush with dry powder. But, there was, and continues to be, a sense of missed opportunity.

“There was a sense of ‘we won’t miss the China internet tech opportunity when it presents itself in India,” says Vivek Pandit, Senior Partner, and global co-leader of McKinsey & Company’s Private Equity and Principal Investment group. A reason why he also believes that Jio Platforms’ eye-popping fund raise last year was “effectively a levered play on India’s digital future.”

Last year, Mukesh Ambani-led Reliance Industries (RIL) raised $20 billion for its digital services arm, Jio Platforms, in the months during the nation-wide lockdown. Its retail business, Reliance Retail Ventures Limited, then went on to raise a staggering $6 billion in growth capital. Looking back on the Jio fund raise, Pandit, in an exclusive interaction with Fortune India, says, “It’s (Jio’s) ability to operate with required flexibility in a regulated environment was attractive to investors. You had a single play across multiple potential digital domains.”

Fortune India Latest Edition is Out Now!
India's Top 100 Billionaires

August 2025

As India continues to be the world’s fastest-growing major economy, Fortune India presents its special issue on the nation’s Top 100 Billionaires. Curated in partnership with Waterfield Advisors, this year’s list reflects a slight decline in the number of dollar billionaires—from 185 to 182—even as the entry threshold for the Top 100 rose to ₹24,283 crore, up from ₹22,739 crore last year. From stalwarts like Mukesh Ambani, Gautam Adani, and the Mistry family, who continue to lead the list, to major gainers such as Sunil Mittal and Kumar Mangalam Birla, the issue goes beyond the numbers to explore the resilience, ambition, and strategic foresight that define India’s wealth creators. Read their compelling stories in the latest issue of Fortune India. On stands now.

Read Now

“If you think about the investors they [RIL] brought in, including strategics like Facebook and Google, blue chips alternative investors like TPG, KKR and SilverLake and long-term Middle East sovereigns like ADIA and PIF,” says Pandit, it’s a “terrific balance of investors that not only lend credibility and heft, they are also long on India as an investment destination.”

So when a company like Jio Platforms divests even minority stakes, there is short and a long-term value created. Jio, he adds, was able to raise needed cash at attractive valuations, and find buyers who understood the long-term value thesis. “Understanding investor demand and their own need to retire debt was key,” says Pandit.

Moreover, the promoters (Mukesh Ambani), he says, understood that several of these strategics and classic private equity funds missed the China tech opportunity for different reasons. “Emerging market digital leapfrog opportunities - the Tencents, the Alibabas,” points out Pandit. “He (Mukesh Ambani) likely understood that funds did not want to miss the India opportunity.” Interestingly, there were as many as seven common investors between RIL’s digital and retail services businesses, a clear indication that the RIL ecosystem is well and truly ready for a retail juggernaut—both online and offline.

Fortune India is now on WhatsApp! Get the latest updates from the world of business and economy delivered straight to your phone. Subscribe now.