Jio strikes third stake deal in less than three weeks

MUMBAI: US-based Vista Equity Partners will buy a 2.32% stake in Reliance Industries’ Jio Platforms for ~11,367 crore, the company said on Friday.

This will be the third stake sale, after Facebook and Silver Lake, in less than three weeks that will inject a combined ~60,596 crore in the conglomerate to help it pare debt.

THE INVESTMENT GIVES JIO AN EQUITY VALUE OF ₹4.9L-CR AND ₹5.16L-CR ENTERPRISE VALUE

MUMBAI: Vista Equity Partners agreed to invest ₹11,367 crore in a Reliance Industries Ltd (RIL) unit on Friday, the Indian company’s third mega stake sale in as many weeks, as chairman Mukesh Ambani raced to raise a total of ₹60,596 crore from three investors, including Facebook Inc. US-based Vista Equity Partners will get a 2.3% stake in Jio Platforms Ltd, RIL’s digital unit.

Facebook and Silver Lake Partners also bought stakes in Jio in the past 15 days. The Vista investment gives Jio an equity value of ₹4.91 lakh crore and an enterprise value of ₹5.16 lakh crore. The investment proceeds will be used to redeem optionally convertible preference shares held by parent RIL, and achieve the company’s aim to wipe off its debt by March 2021.

As of December 31, Reliance’s net debt stood at ₹1.53 lakh crore.

“This (the Vista deal), along with the Silver Lake and Facebook deals, coupled with the closure of its ₹7,000 crore stake sale to BP in its oil marketing venture, should imply a cash infusion of over ₹67,000 crore (in RIL). In addition, the closure of its recently announced ₹53,215 crore rights issue and the management’s hope to sign another potential investor of a size similar to Facebook in Jio Platforms in coming months gives Reliance confidence that it will reduce net debt by ~1.5 lakh crore well before the target date of March 21,” analysts at CLSA said.

Jio Platforms comprises RIL’s digital businesses, including telecom services of Jio Infocomm (mobile and broadband), Jio’s suite of apps, digital investments and technology capabilities.