Reliance Industries on Friday said it has raised over Rs 13,640 crore from selling stake in its digital unit to Abu Dhabi-based sovereign investor Mubadala and private equity Silver Lake, taking the cumulative fund raising to Rs 92,202 crore that will help pare debt at the oil-to-telecom conglomerate.
Reliance early on Friday morning announced sale of 1.85 per cent stake in Jio Platforms to Mubadala Investment Company for Rs 9,093.60 crore. Late on Friday evening, it raised another Rs 4,546.80 crore from sale of further 0.93 per cent stake to Silver Lake.
“With this investment, Jio Platforms has raised Rs 92,202.15 crore from leading technology investors in less than six weeks,” the company said in a statement.
Silver Lake had previously taken 1.15 per cent stake in Jio Platforms for Rs 5,655.75 crore. The additional investment it made on Friday would take its stake to 2.08 per cent.
With these investments, Reliance has sold all of the targeted 20 per cent equity in Jio Platforms ahead of a potential IPO.
“Mubadala Investment Company (Mubadala), the Abu Dhabi-based sovereign investor, will invest Rs 9,093.60 crore in Jio Platforms at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore,” the company said in a statement.
This is the same value at which Silver Lake made the additional investment.
“Silver Lake and its co-investors will invest an additional Rs 4,546.80 crore in Jio Platforms, in addition to the Rs 5,655.75 crore of investment by Silver Lake on May 4, 2020. This brings the aggregate investment by Silver Lake and its co-investors to Rs 10,202.55 crore,” it said.
With this investment, Jio Platforms has raised Rs 92,202.15 crore from leading global technology and growth investors including Facebook, Silver Lake, Vista Equity Partners, General Atlantic, KKR and Mubadala in less than six weeks.
The deals follow Facebook picking up a 9.99 per cent stake in the firm that houses India’s youngest but largest telecom firm on April 22 for Rs 43,574 crore. Within days of that deal, Silver Lake – the world’s largest tech investor – bought a 1.15 per cent stake in Jio Platforms for Rs 5,665.75 crore on May 4.
On May 8, US-based Vista Equity Partners bought 2.32 per cent stake in Jio Platforms for Rs 11,367 crore. On May 17 global equity firm General Atlantic picked up 1.34 per cent stake in Jio Platforms for Rs 6,598.38 crore. This was followed by US private equity giant KKR buying 2.32 per cent for Rs 11,367 crore.
Jio Platforms, a wholly-owned subsidiary of Reliance Industries Ltd, is a next-generation technology company. Reliance Jio Infocomm Ltd, with 388 million mobile subscribers, will continue to be a wholly-owned subsidiary of Jio Platforms.
With about USD 40 billion in combined assets under management and committed capital and a singular focus on the world’s great tech and tech-enabled opportunities, Silver Lake is the global leader in large-scale technology investing.
Its investments have included Airbnb, Alibaba, Alphabet’s Verily and Waymo units, Dell Technologies, Twitter and numerous other global technology leaders.
On Mubadala investment, Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said it is one of the most astute and transformational global growth investors.
“Through my longstanding ties with Abu Dhabi, I have personally seen the impact of Mubadala’s work in diversifying and globally connecting the UAE’s knowledge-based economy. We look forward to benefitting from Mubadala’s experience and insights from supporting growth journeys across the world,” he said.
On Silver Lake, he said Silver Lake’s additional investment in Jio Platforms, within a span of five weeks during the COVID-19 pandemic, “is a strong endorsement of the intrinsic resilience of the Indian economy, which will surely grow bigger with comprehensive digital enablement.”
Khaldoon Al Mubarak, Managing Director and Group CEO, Mubadala Investment Company, said: “We are committed to investing in, and actively working with, high growth companies which are pioneering technologies to address critical challenges and unlock new opportunities.”
“We have seen how Jio has already transformed communications and connectivity in India, and as an investor and partner, we are committed to supporting India’s digital growth journey. With Jio’s network of investors and partners, we believe that the platform company will further the development of the digital economy.”
Mubadala invests and partners to advance Abu Dhabi’s diversified, globally integrated economy across sectors that are driving global growth and addressing critical challenges. A significant aspect of this mandate is transformative information and communications technology investments which include cognitive computing, ICT infrastructure, telecoms, and satellite operations.
Ambani, 63, chairman and managing director of Reliance, had in August last year set a target of March 2021, to make his conglomerate net debt-free. But thanks to the Facebook 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 March quarter, Reliance had an outstanding debt of Rs 3,36,294 crore and cash in hand of Rs 1,75,259 crore. After adjusting 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.