Jio Platforms Silver Lake deal: RIL says Silver Lake to invest Rs 5,656 crore in Jio Platforms

NEW DELHI: Reliance Industries on Monday said its telecom business Jio Platforms will receive Rs 5,655.75 crore investment from Silver Lake at an equity value of Rs 4.90 lakh crore and an enterprise value of Rs 5.15 lakh crore. This, the company said, represents a 12.5 per cent premium to the equity valuation of the Facebook investment announced on April 22.

The move is expected to intensify Reliance Industries’ bid to become net zero debt company by March 2021.

Silver Lake is a technology investor with approximately $40 billion in combined assets under management. Some of its major investments include AirBNB, Alibaba, Ant Financial, Alphabet’s Verily and Waymo units, Dell Technologies and Twitter besides other global technology leaders.

“In the wake of severe economic disruptions caused by the Covid-19 pandemic, globally and especially within India, this partnership with one of the most renowned tech investors globally, Silver Lake, has special significance,” Reliance Industries said in a note.

Morgan Stanley acted as financial adviser to Reliance Industries. AZB & Partners and Davis Polk & Wardwell acted as legal counsels.

The news came days after Reliance Industries last week approved the biggest-ever rights issue of Rs 53,100 crore at Rs 1,257 per share.

“With the FB deal already done, the imminent closure of the Tower/Fiber InVit and the ongoing negotiations with Aramco to sell 20 per cent in the Oil to Chemicals (OTC), the infusion of fresh equity by the promoter group would inspire confidence in the respective business by existing and prospective strategic investors,” Centrum Broking said in a note.

Reliance Industries (RIL) on Thursday reported a 38.73 per cent year-on-year (YoY) fall in consolidated net profit at Rs 6,348 crore for the quarter ended March 31. Profit took a hit due to an exceptional loss of Rs 4,267 crore during the quarter. But analysts largely stayed positive on the stock.

Morgan Stanley says a faster pace of balance sheet debt reduction is in works. It noted that March was the second straight quarter when the company reports positive free cash flow. RIL’s refining business outperformed with full utilisation rates and higher margins, it said while maintaining its overweight stance on the stock.

CLSA, which has a price target of Rs 1,770 on the stock, said while March was a weak quarter, asset monetisation plan should help the stock.