Reliance Industries has recently announced a sale of Rs.11,367 crore stake in Jio Platforms, its digital unit to Vista Equity.
Jio Platforms has raised Rs.60,596.37 crore from various leading technology investors in over 2 weeks to help reduce its debts. The deal will reportedly value the company, which houses Reliance Jio Infocomm, the telecoms arm of Reliance Industries, at a Rs.4.91 lakh crore equity value and Rs.5.16 lakh crore enterprise value. It is the 3rd high profile-investment made in Reliance Jio in less than 3 weeks.
The recent investment from Vista will translate into an equity stake of 2.32% in Jio Platforms, reportedly making Vista the largest investor in the company behind Reliance Industries & Facebook. This announcement comes along the heels of Reliance Industries making a Rs.43,574 crore agreement with Facebook regarding a 9.99% stake in Jio, as well as securing an investment of a Rs.5,656 crore from Silver Lake, a private equity firm.
According to Mukesh Ambani, managing director and chairman of Reliance Industries, Vista shares the same vision with the company and its partners of expanding the digital ecosystem in India. The partners believe technology’s transformative power to be the key to developing a sustainable digital environment in the future.
The recent deal, in addition to Reliance’s plan to sell Rs.53,125 crore in its new shares, will help eliminate its net debt of $21.4 billion by 2020 end. The company’s shares rose by around 3% following the announcement. Vista has capital commitments of over $57 billion and has invested in various companies across sectors including real estate, healthcare, and media & entertainment.
In April, Reliance reported a net profit decline of 39% to Rs.6,348 crore in the Q1 of 2020, hit by a sharp decline in fuel demand and oil prices. It had previously posted an increase in the net profit by 177.5% to Rs.2,331 crore in the Q4 of the fiscal year 2019-20. The net profit of the entire fiscal year soared by 88% to Rs.5,562 crore in 2019-20.