Private equity firm Vista Equity Partners said on Friday it will invest $ 1.5 billion in Reliance Jio Platforms that join the social conglomerate Facebook and Silver Lake and have also placed bets on the Indian telecommunications giant in the past few weeks.
The planned announcement, with which the US-based software-based buyout company Vista Equity Partners will receive a 2.32% stake in Reliance Jio Platforms, rates India's leading telecommunications operator at $ 65 billion (stock valuation) – the same rating , which is implied by the investment in Silver Lake and a 12.5% premium over the Facebook deal, said the Indian company.
In the past three weeks, Reliance Jio Platforms has announced plans to sell approximately 13.4% of the company's stake in Facebook. Private equity firms Silver Lake and Vista Equity Partners for around $ 8 billion.
Reliance Jio Platforms was launched in the second half of 2016 and revitalized the Indian telecommunications industry with affordable data plans and free voice calls. Jio Platforms, a subsidiary of Reliance Industries (India's most valuable company), has accumulated 388 million subscribers since its inception to become the nation's leading telecommunications operator.
Reliance Industries, which generates most of its profits from oil refineries and petrochemicals, announced on Friday that Jio Platforms, which has invested more than $ 30 billion over the years, "is a global technology leader and one of the leading digital economies should be in the world. "
With a stock valuation of 4.9 billion rupees with the Silver Lake deal, Jio Platforms will work with Hindustan Unilever, the fourth largest company in India. Parent Reliance and TCS far ahead. HDFC bank next? pic.twitter.com/DmpTDxcNlH
– Madhav Chanchani (@madhavchanchani), May 4, 2020
Vista, which started investing in the software industry 20 years ago and reduced checks to more than four dozen companies, said it would look for ways to expand the reach of its portfolio companies' products and services in India. Some of its portfolio companies are already well represented in India, the second largest Internet market in the world, said Vista.
"We are excited to be able to leverage the expertise and multi-level support that Vista has offered to invest globally for the benefit of Jio," said Mukesh Ambani, chairman of Reliance Industries, in a statement.
The new engagement would help Ambani, India's richest man, further consolidate his commitment to investors last year when he said he plans to reduce Reliance's net debt from around $ 21 billion to zero in early 2021. The core business – oil refining and petrochemicals – was hit hard in the middle of the coronavirus outbreak. Net income for the quarter ended March 31 declined 37%.
In the company's call for profit last month, Ambani said that several companies had expressed interest in buying shares in Jio Platforms as part of the contract with Facebook.
Mukesh Ambani launches global investors in India and supports the private equity game in a pandemic. #vista #jio #silverlake
– BK (@drinkcircle), May 8, 2020
Facebook said it would not only offer Jio Platforms capital for a 9.99% stake in the company, but would also work with the Indian giant in a number of areas, starting with e-commerce. Days later, JioMart, an e-commerce company from India's highest company, began testing an "order system" on WhatsApp, the most popular smartphone app in India with over 400 million active users in the world's second largest Internet market.
In a statement, Robert F. Smith, founder, chairman and CEO of Vista said: “We believe in the potential of the digital society that Jio is building for India. Mukesh's vision as a global pioneer, along with Jio's world-class leadership team, has created a platform to scale and drive the data revolution that has begun. "
Reliance Jio Platforms also owns a number of services, including the music streaming service JioSaavn (which it wants to make public), smartphones, the broadband business, the on-demand live television service JioTV and the payment service JioPay.