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Reliance Jio raises Rs 5,656 crore from PE firm Silver Lake

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This investment values Jio Platforms at an equity value of Rs 4.90 lakh crore and an enterprise value of Rs 5.15 lakh crore.

Reliance Industries and Jio Platforms announced on Monday (4 May) that Silver Lake will invest Rs 5,655.75 crore into Jio Platforms. This investment values Jio Platforms at an equity value of Rs 4.90 lakh crore and an enterprise value of Rs 5.15 lakh crore and represents a 12.5% premium to the equity valuation of the Facebook investment announced on 22 April 2020.

Commenting on the transaction with Silver Lake, Mukesh Ambani, chairman and managing director, Reliance Industries, said, "I am delighted to welcome Silver Lake as a valued partner in continuing to grow and transform the Indian digital ecosystem for the benefit of all Indians. Silver Lake has an outstanding record of being a valuable partner for leading technology companies globally. Silver Lake is one of the most respected voices in technology and finance. We are excited to leverage insights from their global technology relationships for the Indian Digital Society's transformation."

Commenting on the investment, Egon Durban, Silver Lake Co-CEO and Managing Partner, said, "Jio Platforms is one of the world's most remarkable companies, led by an incredibly strong and entrepreneurial management team who are driving and actualizing a courageous vision. They have brought extraordinary engineering capabilities to bear on bringing the power of low-cost digital services to a mass consumer and small businesses population. The market potential they are addressing is enormous, and we are honored and pleased to have been invited to partner with Mukesh Ambani and the team at Reliance and Jio to help further the Jio mission."

The company clarified that the transaction is subject to regulatory and other customary approvals.

Silver Lake is the global leader in large-scale technology investing. Its mission is to build and grow great companies by partnering with world-class management teams. Its investments have included Airbnb, Alibaba, Ant Financial, Alphabet's Verily and Waymo units, Dell Technologies, Twitter and numerous other global technology leaders.

Jio Platforms, a wholly-owned subsidiary of Reliance Industries, is a next-generation technology company building a Digital Society for India by bringing together Jio's leading digital apps, digital ecosystems.

Reliance Industries was down 0.49% at Rs 1459.80. Meanwhile, the S&P BSE Sensex was down 1399.06 points or 4.15% at 32,318.56.

On a consolidated basis, Reliance Industries (RIL)'s net profit fell 38.74% to Rs 6,348 crore on 2.5% decline in revenue to Rs 151,209 crore in Q4 March 2020 over Q4 March 2019. Reliance Jio Infocomm reported a 177.50% YoY and 72.70% QoQ growth in net profit at Rs 2,331 crore in Q4 quarter. Its subscriber base grew 26.30% YoY to 387.50 million, with each user spending an average of Rs 130.60 a month during the quarter, the company said in a statement.

Meanwhile, RIL's board approved issuance of equity shares of Rs 10 each of the company of an issue size of Rs 53,125 crore by way of 'rights issue' to eligible equity shareholders of the company as on the record date. The price for the rights issue has been determined at Rs 1,257 per share and the share ratio at 1:15. The promoters have confirmed that in addition to subscribing to their aggregate entitlement in full, they will also subscribe to all the unsubscribed portion.

Further, RIL said it will hive off its oil-to-chemicals (O2C) business into a separate division. The RIL's board has approved the proposal, while it needs to get approved by the National Company Law Tribunal. O2C undertaking of the company comprises entire oil-to-chemicals business of the company consisting of refining, petrochemicals, fuel retail & aviation fuel (majority interest only) and bulk wholesale marketing businesses together with its assets and liabilities, as more particularly set out in the scheme.

RIL has been exploring various opportunities to bring in strategic/other investors in the O2C Business. To facilitate such investments, it is proposed to transfer the O2C Undertaking into a separate wholly-owned subsidiary of the company. Accordingly, this scheme is being proposed for transfer of O2C business of the company to Reliance O2C Limited. No shares are proposed to be issued pursuant to the scheme. Therefore, there will be no change in the shareholding patterns of the company and Reliance O2C Limited. Further, Reliance O2C Limited is not seeking listing of its shares and will continue to be an unlisted company.

RIL is India's largest private sector company. RIL's activities span hydrocarbon exploration and production, petroleum refining and marketing, telecom and digital services.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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First Published: Mon, May 04 2020. 09:30 IST
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