Jio Platforms raises Rs. 11,367 crore from Vista Equity
Jio Platforms, the entity holding telecom and digital businesses of Reliance Industries Limited (RIL), has raised Rs. 11,367 crore from US-based private equity firm Vista Equity Partners. The investment comes as the third major fund-raise for the Mukesh Ambani-led company in recent weeks, following its deals with social media giant Facebook and Silver Lake. Here's all you need to know about it.
Investment for 2.32% stake in Jio Platforms
As announced by Reliance Industries and Vista Equity, the latest deal will see the latter invest Rs. 11,367 crore or $1.5 billion for a 2.32% stake in Jio Platforms. "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," RIL said in a statement issued on Friday morning.
Largest stakeholder after RIL and Facebook
The deal makes Vista Equity the largest stakeholder in Jio Platforms after Reliance Industries and Facebook. Facebook had invested Rs. 43,574 crore in Jio Platforms for a 9.9% stake. Then, Silver Lake, another American private equity firm, pumped Rs. 5,655.75 crore for a 1.15% stake. This means RIL has sold a collective 13.46% stake in Jio Platforms for Rs. 60,596.37 crore in recent weeks.
Vista Equity has over four dozen companies in its portfolio
Headquartered in Texas, Vista Equity has been dominating as a leading software-focused buyout firm with more than four dozen companies in its portfolio and over $57 billion in cumulative capital commitments. The PE giant says some of its companies already have a significant footprint in India, with a total employee base of over 13,000. Now, it hopes to expand the reach of their products/services.
Here's what Robert F. Smith, Vista's co-founder, said about Jio
"We believe in the potential of the Digital Society that Jio is building for India. Mukesh's vision as a global pioneer, alongside Jio's world-class leadership team, have built a platform to scale and advance the data revolution it started."
Jio Platforms dominates India's digital space
Jio Platforms dominates the digital space in India; its telecom business is the biggest in the country with 388 million subscribers while its digital business includes services like JioMart, smart home solutions, and more. Following the deal, Ambani said, "We are excited to leverage the professional expertise and multi-level support that Vista has been offering to its investments globally for the benefit of Jio."
Reliance is looking to clear debts
That said, this and the other two investments would help Ambani fulfill his goal of making Reliance Industries debt-free by early 2021. The company has a total net debt of Rs. 1.61 lakh crore, of which it expects to raise Rs. 1.04 lakh crore by June, Chief Financial Officer Srikanth Venkatachari said in a recent earnings call. The rest will be cleared by year-end.