You are here: Home » PTI Stories » National » News
Business Standard

RIL shares zoom over 10 pc after Facebook deal; market cap rallies Rs 80,710 cr

Topics
Business Finance

Press Trust of India  |  New Delhi 

Shares of Reliance Industries on Wednesday jumped over 10 per cent after Facebook announced an investment of USD 5.7 billion (Rs 43,574 crore) to buy a 10 per cent stake in Jio Platforms.

The scrip of the country's most valued firm by market cap advanced 10.30 per cent to close at Rs 1,363.35 on the BSE. During the day, it surged 12 per cent to Rs 1,384.70.

On the NSE, shares of the company zoomed 9.83 per cent to close at Rs 1,359.

It was the top gainer on both the 30-share BSE Sensex and NSE Nifty-50.

In traded volume terms, 26.30 lakh shares were traded on the BSE and 6.5 crore shares on the NSE during the day.

The company's market valuation also jumped by Rs 80,710.7 crore to Rs 8,64,267.70 crore.

Earlier in the day, Facebook announced an investment of USD 5.7 billion (Rs 43,574 crore) to buy a 10 per cent stake in the firm that houses billionaire Mukesh Ambani's telecom arm Jio as the social media giant looks to expand presence in its largest market in terms of subscriber base.

"Today we are announcing a USD 5.7 billion, or Rs 43,574 crore, investment in Jio Platforms Ltd, part of Reliance Industries Ltd, making Facebook its largest minority shareholder," the company said in a statement.

Reliance in a separate statement said the investment by Facebook values Jio Platforms at Rs 4.62 lakh crore pre-money enterprise value (USD 65.95 billion, assuming a conversion rate of Rs 70 to a US dollar).

"Facebook's investment will translate into a 9.99 per cent equity stake in Jio Platforms on a fully diluted basis," it said.

Jio Platforms, a wholly-owned subsidiary of Reliance Industries Ltd (RIL), houses digital services of the group. Reliance Jio Infocomm, is a wholly-owned subsidiary of Jio Platforms.

The Facebook deal is part of value unlocking by RIL to cut debt. RIL has been seeking strategic partnerships across its businesses while targeting to deleverage its balance sheet.

RIL was also the biggest contributor in Wednesday's market rally where the 30-share BSE index rose by 742.84 points or 2.42 per cent to close at 31,379.55.

"RIL had restructured its digital business into one consolidated wholly-owned subsidiary - Jio Platforms - which would host all the digital initiatives of the firm, including Jio digital services (mobile, broadband), apps, tech capabilities (AI, Big Data, IoT) and investments (like Den, Hathway)," Credit Suisse said in a note.

It said that Facebook's investment into this entity will further Reliance Industries' digital initiatives and will help in deleveraging.

"...The deal will aid in achieving net debt-free (target) by March 2021. As of December 31, 2019, net debt for the group stands at Rs 1,531 billion (Rs 1.53 lakh crore) and with Facebook's investment, this should put RIL on course to be net debt free by Mar-2021," it said.

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

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, April 22 2020. 16:54 IST
RECOMMENDED FOR YOU