Reliance Industries said on Sunday it sold a 1.16 percent stake in its digital unit to Abu Dhabi Investment Authority (ADIA) for Rs. 5683.50 crore, taking the cumulative funds raising to Rs. 97,885.65 crore, which will help pare at the oil-to-telecom conglomerate.
“This investment values Jio Platforms at an equity value of Rs. 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore. ADIA’s investment will translate into a 1.16% equity stake in Jio Platforms on a completely diluted basis,” the company said in a statement.
With this investment, Jio Platforms raised Rs 97,885.65 crore from leading global investors including, including Facebook, Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala, and ADIA in less than seven weeks.
The AIDA deal comes within days of Abu Dhabi sovereign wealth fund, Mubadala Investment Company, picking up 1.85 percent in Jio platforms for Rs 9,093,60 crore on June 5. On that day, Silver Lake private equity fund invested another Rs 4,546.80 crore for an additional 0.93 percent stake in Jio platforms.
With these investments, Reliance has sold all the targeted 21 percent in Jio Platforms ahead of a potential IPO.
Jio Platforms, a wholly-owned subsidiary of Reliance Industries Ltd, is a next-generation technology company. Reliance Jio Infocomm Ltd, which has 388 million mobile subscribers, will continue to be a wholly-owned subsidiary of Jio Platforms.
The deals follow Facebook, picking up a 9.99 percent stake in the firm that houses India's youngest but largest telecom firm on April 22 for Rs 43,574 crore. Within days of the deal, Silver Lake, the world's largest tech investor, bought a 1.15 percent stake in Jio Platforms for Rs. 5665.75 crore on May 4.
On May 8, US-based Vista Equity Partners bought a 2.32 percent stake in Jio Platforms for Rs. 11,367 crore. On May 17, global equity firm General Atlantic picked up a 1.34 percent stake in Jio Platforms for Rs.6,598.38 crore. This was followed by the US private equity giant KKR buying 2.32 percent for Rs 11,367 crore.
On June 5, Silver Lake made an additional investment, to take its stake to 2.08 percent.
Established in 1976, ADIA is a globally-diversified investment that prudently invests funds on behalf of the Government of Abu Dhabi through a strategy focused on long-term value creation. Managing a global investment portfolio that is diversified into more than two dozen asset classes and sub-categories.
Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said: “I am delighted that ADIA, with its track record of more than four decades of successful long-term value investing across the world, has been involved with Jio Platforms in its mission to take India digital leadership and generate inclusive growth opportunities. This investment is a strong endorsement of our strategy and India's potential. "
The transaction is subject to regulatory and other customary approvals.
Jio Platforms is at the forefront of the digital revolution in India and is ready to take advantage of major socio-economic developments and the transformative effects of technology on the way people live and work.
“The rapid growth of the business, which has established itself as a market leader in just four years, has been built on a proven track record of strategic execution. Our investment in Jio is a further demonstration of ADIA's ability to draw on deep regional and sector expertise to invest globally in market-leading companies and alongside proven partners.” Hamad Shahwan AlDhaheri, Executive Director of the Private Equities Department at ADIA, said."
Morgan Stanley acted as financial advisor to Reliance Industries and AZB & Partners, and Davis Polk & Wardwell acted as legal advisor.
Ambani, 63, chairman and managing director of Reliance, set a target for March 2021 in August last year, to make his conglomerate net debt-free. But thanks to Facebook's deal, a Rs 53,125 crore rights issue, private equity investments and more stake sale to companies such as Saudi Aramco, the target is likely to be achieved by December.
At the end of the March quarter, Reliance had an outstanding debt of Rs 3,36,294 crore and Rs Rs 1,75,259 crore. After adjusting the cash, the net debt came to Rs 1,61,035 crore.
Of the outstanding debt, Rs 2,62,000 crore is on Reliance books and Rs 23,000 crore is with Jio.
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