On May 17, 2020 Reliance Industries Limited(RIL) announced the sale of 1.34% stake in its digital services subsidiary, Jio Platforms to global Private Equity (PE) firm General Atlantic for Rs 6,598.38 crores, to accelerate consumer business and cut debt. After this investment Jio Platforms will have an equity value of Rs 4.91 trillion and an enterprise value of Rs 5.16 trillion.
i.General Atlantic’s investment will translate into a 1.34% equity stake in Jio Platforms on a fully diluted basis. The transaction is subject to regulatory and other customary approvals.
ii.This deal is the 4th one in less than four weeks(within a month) with this investment RIL has raised Rs 67,194.75 crores by selling 14.8% in Jio. Strategic and financial investors are to form 20% of Jio Platforms.
iii.Jio’s previous deal- Facebook has bought a 9.99% stake in Jio Platforms for Rs 43,574 crores on April 22. The deal was followed by US private equity firm Silver Lake, the world’s largest tech investor, bought 1.15% stake in Jio Platforms for Rs 5,665.75 crores on May 4. US-based Vista Equity Partners bought a 2.32% stake in Jio Platforms for Rs 11,367 crores on May 8.
iv.Besides the sale of Jio stake, RIL hopes to raise Rs 53,125 crore in the country’s biggest-ever rights issue.
Reasons for acquisitions
As of March 2020, RIL’s gross debt stood at Rs 3.36 trillion and net debt stood at Rs 1.61 trillion. Of the outstanding debt, Rs 2,62,000 crores is on Reliance books and Rs 23,000 crores is with Jio. All these initiatives along with the proposed stake sale to Saudi oil giant Aramco, will help the company to become net debt-free by March 2021.
It is a wholly-owned subsidiary of Reliance Industries Ltd, is a next-generation technology company. Reliance Jio Infocomm Ltd, with 388 million mobile subscribers, will continue to be a wholly-owned subsidiary of Jio Platforms.
It is a leading global growth equity firm with a 40-year track record of investing in the technology, consumer, financial services and healthcare sectors & has more than USD 34 billion in assets under management. It has a longstanding tradition of backing disruptive entrepreneurs and companies around the world, including Airbnb, Alibaba and other global technology leaders.It has been present in India for nearly two decades.
Chief Executive Officer(CEO)–William E. Ford
Head of India & Southeast Asia
Managing Director(MD), Mumbai- Sandeep Naik
Corporate Office– Mumbai, Maharashtra
Chairman & Managing Director(MD)– Mukesh D. Ambani