Reliance Industries Ltd said on Monday private equity firm Silver Lake will invest Rs. 5,656 crores ($746.74 million) in its digital arm, giving it a valuation of Rs. 4.90 lakh crores. The deal comes days after Facebook said it would spend Rs. 43,574 crores to buy a 9.99 percent stake in Jio Platforms – the digital services entity that houses Reliance’s telecoms arm Jio Infocomm, as well as its news, movie and music apps, along with other businesses.
The deal adds to a flurry of fund raising activity announced by the oil-to-telecoms group in recent weeks including a $7 billion (roughly Rs. 52,900 crores) share sale, as it aims to eliminate $21.4 billion (roughly Rs. 1.61 lakh crores) net debt by the end of this year.
Reliance on Thursday reported a 39 percent fall in March quarter profit, hit by a sharp fall in oil prices and lower fuel demand, and said at the time that had received investor interest for a Facebook-like deal. Not further detail were provided.
The Rs. 5,665 crores deal with Silver Lake values Jio Platforms – the digital services entity that houses Reliance’s telecoms arm Jio Infocomm and other businesses, at Rs. 4.90 lakh crores, Reliance said in a regulatory filing.
It represents a 12.5 percent premium to the equity valuation of the Facebook investment.
Facebook said in April it will buy a 9.99 percent stake in Jio Platforms, looking to capitalize on WhatsApp’s extensive reach in the country and roll out services for India’s grocers and small businesses.
Shares in the Mumbai-based conglomerate, led by billionaire Mukesh Ambani, Asia’s richest man, were trading down 1 percent in a broader Mumbai market that was down 4.2 percent as of 09:34am IST.
Developing story, check back for more.
© Thomson Reuters 2020