Reliance Industries (RIL) will sell 2.3% stake in Jio Platforms to Vista Equity Partners for ₹11,367 crore, giving its subsidiary an equity valuation of ₹4.91 trillion. The enterprise value is pegged at ₹5.16 trillion. This is the third stake sale by RIL in Jio in just over two weeks, Facebook and private equity (PE) Silver Lake having invested in two separate rounds.
The 2.3% stake sale is at a negligible premium to the Silver Lake deal where the PE fund had paid ₹5,655.75 crore for a 1.15% stake. The Vista deal thus comes at a premium of a mere 0.5% to the Silver Lake deal that was announced on 5 May. The Silver Lake transaction had come at a 12.5% premium to the Facebook deal. Silver Lake had bought 1.15% stake in Jio Platforms for ₹5,655.75 crore. The Mark Zuckerberg company had paid ₹43573.62 crore for a 9.99% stake. Jio has thus raised ₹60,596.37 crore through the three rounds of fund raising.2.3%
The three global companies now own 13.4% stake in Jio Platforms. All the three transactions are subject to regulatory approvals, with the one with Facebook likely to undergo a tighter scrutiny given concerns over net neutrality.
The three stake sales are part of RIL's plan to be debt-free by March. Most likely, the target is likely to be achieved before that.
Of the ₹43,574 crore that it will receive from Facebook, Jio plans to use ₹28,000 crore to redeem optionally convertible preference shares (OCPS) of its parent RIL and retain ₹15,000 crore in its books, Jio's top management had said in a conference call on 22 April.
The news of the deal sent the RIL share price spurting by 3% to climb to day's high of ₹1,550 so far in the session undewerway today. The broader index, the BSE Sensex, was up 1.4% or 457 points at 31,885.
Reliance Jio Infocomm , which provides connectivity platform to over 388 million subscribers, will continue to be a wholly-owned subsidiary of Jio Platforms.
As part of its plans to be debt-free, RIL is also raising ₹53,215 crore via a rights issue. The company has appointed nine investment banks for its planned fund raise, according to a Mint report.
Vista portfolio companies have a significant presence in India with over 13,000 employees. It has more than $57 billion in cumulative capital commitments and has so far exclusively
invested in enterprise software business.