Silver Lake’s investment values Jio Platforms at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore, and will translate into a 2.08% equity stake in Jio Platforms on a fully diluted basis.
This is the second investment by Silver Lake.
” Reliance Industries Limited (“Reliance Industries”) and Jio Platforms Limited (“Jio Platforms”) announced today that Silver Lake (“Silver Lake”) and its co-investors will invest an additional Rs 4,546.80 crore in Jio Platforms, in addition to the Rs 5,655.75 crore of investment by Silver Lake announced on May 4, 2020,” said RIL in a statement on Friday evening.
This will be the seventh investment for the digital and telecom business unit of Reliance Industries and it helped push the shares of the oil-telecom-retail conglomerate to an all-time high. Infact in less than 24 hours , the company announced back to back investments in Jio Platforms.
Jio Platforms has raised Rs 92,202.15 crore from leading technology investors in less than six weeks.
” I would like to emphasise that Silver Lake’s additional investment in Jio Platforms, within a span of five weeks during the COVID-19 pandemic, is a strong endorsement of the intrinsic resilience of the Indian economy, which will surely grow bigger with comprehensive digital enablement,” said chairman and MD Mukesh Ambani in a statement.
On Friday early morning, the company had announced it is set to raise Rs 9,093.6 crore by selling a 1.85% stake to Mubadala Investment Co., Abu Dhabi’s second-largest sovereign investor.
The funds from Jio Platforms and the Rs 53,124 crore from a rights issue will help lower Reliance’s consolidated net debt by over 90% from Rs 1.61 lakh crore at the end of FY20. Reliance is now well placed to meet its zero net debt target March 2021, analysts said.
With approximately $ 40 billion in combined assets under management and committed capital and a singular focus on the world’s great tech and tech-enabled opportunities, Silver Lake is the global leader in large-scale technology investing
“The investment momentum behind Jio validates a compelling business model and underscores our admiration for Mukesh Ambani, his team and their courageous vision in creating and building one of the world’s most remarkable technology companies.” said Egon Durban, Silver Lake Co-CEO and Managing Partner.
The transaction is subject to regulatory and other customary approvals.
Analysts said Reliance may now be close to the last of such deals, having crossed its target. At its March quarter earnings shortly after Facebook agreed to buy a 9.99% stake for Rs 43,574 crore, Reliance said it had closed out half of the funds it was aiming to raise from Jio Platforms.
Reliance shares touched an all-time high of Rs 1,617.70 on the BSE Friday, before closing little changed. The Sensex gained 0.9%. This deal was announced after market hours.
The Reliance unit comprises mostly its telecom business under Reliance Jio Infocomm, which is the largest in the country with more than 388 million subscribers, besides other digital properties and investments. Reliance, which is trying to transform into a consumer technology giant from an oil and petrochemicals major, has talked about building Jio Platforms into a digital entity on the lines of Alphabet and Tencent.
Before the sixth and seventh deal , Jio Platforms attracted investments from Facebook and private equity funds Silver Lake, Vista Equity Partners, General Atlantic and KKR for a combined holding of 17.12%.
The fund raising, ahead of an expected IPO in two years, comes as Reliance raised Rs 53,124 crore from a rights issue that closed on Wednesday.
Morgan Stanley acted as financial advisor to Reliance Industries and AZB & Partners and Davis Polk & Wardwell acted as legal counsels. Latham & Watkins LLP, Shardul Amarchand Mangaldas & Co and Simpson Thacher & Bartlett LLP acted as legal counsels to Silver Lake.