Commercial due diligence support to TPG as part of its USD600 million investment in Jio Platforms in India

The problem

• Jio Platforms, the parent company of Reliance Jio¹ and home to the latter’s digital ventures, was in the midst of one of the largest global fundraising exercises ever as the COVID-19 pandemic hit
• Our client, TPG, was considering investment in Jio Platforms, and commissioned Analysys Mason to conduct commercial due diligence of Jio Platforms, including a valuation of its telecoms and digital businesses

The solution

• Our highly skilled team helped the client to answer key questions, which formed critical inputs to the asset’s valuation
• We developed a full P&L for the asset’s telecoms business (including wireless and wireline) by
  • developing a detailed market, market share, network and financial model
  • conducting a number of detailed assessments in support of our financial model, including elasticity models to estimate data usage at various price points, and multi-variate regressions
• For the digital business, we reviewed the business plan of the asset, including market size, market share and cost assumptions across digital verticals (e.g. over-the-top (OTT) services, e-commerce/online grocery and payments)
• We developed detailed quantitative models and provided insights on market evolution in comparable South-East Asian markets

Figure: Comparison of target’s 5G readiness vs readiness of competitors

The result

• Our work was instrumental in informing TPG’s decision to invest in Jio Platforms – we helped to answer critical questions regarding the expected evolution of India’s telecoms and digital market, the potential market share that Jio Platforms could gain, and the related investments required

¹ Reliance Jio is the largest mobile operator in India, having achieved ~35% market share in the three years since its launch