Last month, Reliance Industriesannounced about their ₹43,574 crore deal with Facebook.The Facebook-Jio deal was the social media network’s biggest since the $22 billion buyout of WhatsApp . This deal valued Jio at Rs 4.62 lakh crore ($65.95 billion).
This week, US based private equity firm Silver Lake has decided to invest ₹ 5,655.75 crore into Jio Platforms for 1.15% stake.This investment values Jio Platforms at an equity value of ₹ 4.90 lakh crore.
Silver Lake specialist firm focused on technology company investments.
Founded in 1999, Silver Lake is a pioneer in technology investing, with approximately $40 billion in combined assets under management and committed capital and a team of approximately 100 investment and operating professionals located around the world.Silver Lake’s investments have included Airbnb, Alibaba, Ant Financial, Alphabet’s Verily and Waymo units, Dell Technologies, Twitter and numerous other global technology leaders.
Silver Lake has maintained a strategic discipline since its founding and engages in a synergistic and collaborative approach to investing across investment strategies.
In the other hand, Jio which is led by magnate Mukesh Ambani was launched three years ago and has grown to become India’s largest telecom company. It has accumulated 388 million subscribers by offering call and internet plansfor an affordable price along with a wide suite of products and including chat services, movies, games and music.
Also, RILis shifting its positioning from an energy-driven player to a consumer/technology-focused company. Reliance’s debt as on March 31, 2020 is Rs 3.36 lakh crore. Ambani had said that he plans to make RIL a net debt-free company by the end of this financial year.
Jio-Silver Lake deal is credit-positive as it enhances RIL’s already strong financial flexibility, including the recently announced rights issue ($7 billion) and investments by Facebook. The deal will help reduce RIL’s debt burden, which increased due to the prompt expansion of Jio and other businesses of RIL.
RIL has not specified the total quantum of stake it planning to sell in Jio Platforms to outside parties, as of now, foreign investors holding 11.14%stake in Jio Platforms ltd and these deals indicate the company’s broader plan to take the unit public in the future.
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