This Article is From May 08, 2020

US-Based Firm To Buy Over 2% Stake In Reliance Jio For Rs 11,367 Crore

Jio Platforms has now raised Rs 60,596.37 crore from leading technology investors in less than three weeks, Reliance Industries said.

US-Based Firm To Buy Over 2% Stake In Reliance Jio For Rs 11,367 Crore

The deal places Jio Platforms' equity value at Rs 4.91 lakh crore

Billionaire Mukesh Ambani-led Reliance Industries on Friday announced a Rs 11,367-crore stake sale in its digital unit Jio Platforms, a third deal in little over two weeks that will inject a combined Rs 60,596.37 crore in the telecoms-to-energy group to help it pare debt. The deal will value Jio Platforms - which houses Reliance Industries's telecoms arm Reliance Jio Infocomm - at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore, Reliance Industries said in a statement released early on Friday.

Here are 10 things to know:

  1. Vista's investment will translate into a 2.32 per cent equity stake in Jio Platforms, making the private equity firm the largest investor in Jio Platforms behind Reliance Industries and Facebook, the Mumbai-headquartered conglomerate said.

  2. This is the third high profile-investment in Reliance Jio in the recent past. Jio Platforms has raised Rs 60,596.37 crore from leading technology investors in less than three weeks, Reliance Industries said.

  3. The deal comes after Reliance Industries cut a Rs 43,574-crore deal with Facebook for a 9.99 per cent stake in Jio Platforms on April 22, and just days after it secured a Rs 5,656-crore investment from private equity firm Silver Lake.

  4. “Like our other partners, Vista also shares with us the same vision of continuing to grow and transform the Indian digital ecosystem for the benefit of all Indians. They believe in the transformative power of technology to be the key to an even better future for everyone," said Mukesh Ambani, chairman and managing director, Reliance Industries.  

  5. The deals, along with its plan to sell Rs 53,125 crore in new shares, will help Reliance Industries meet its target of eliminating $21.4 billion of net debt by the end of the year.

  6. Reliance Industries shares rose nearly 3 per cent on Friday after the announcement.

  7. Vista Equity has more than $57 billion in capital commitments and has invested in companies across sectors including media and entertainment, healthcare and real estate.

  8. Reliance last month reported a 39 per cent decline in net profit to Rs 6,348 crore for the quarter ended March 31, hit by a sharp fall in oil prices and lower fuel demand.

  9. Fast-growing telecom service provider Reliance Jio began operations in late 2016. It provides telecom and digital services under brand Jio, and provides a connectivity platform to more than 38.8 crore subscribers.

  10. Reliance Jio posted a 177.5 per cent increase in net profit to Rs 2,331 crore for the fourth quarter of financial year 2019-20. For the entire financial year, Jio's net profit rose 88 per cent to Rs 5,562 crore in 2019-20.