RIL gains as Jio receives 12th cheque worth Rs 1,895 crore

NEW DELHI: Shares of Reliance Industries advanced over 1 per cent in Friday's trade after the oil-to-telecom major announced the twelfth major deal in its telecom venture Jio Platforms, amounting to Rs 1,895 crore for a 0.39 per cent stake.

As per exchange filing, the US semiconductor giant Intel Capital will invest Rs 1,894.50 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 cheque took the total investment amount in Reliance's digital arm to Rs 117,588.45 crore since April 22.

Recently, RIL announced a Rs 11,367 crore deal with Jio Platforms. Before that it announced two deals in a single day worth Rs 6,441.30 crore from global alternative asset firm TPG (Rs 4,546.80 crore) and L Catterton (Rs 1,894.50 crore). The telecom venture also announced Rs 1,04,326.95 crore worth of eight deals in the past months. Those deals were made with Facebook, Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala, ADIA, and TPG.

Jyoti Roy, DVP Equity Strategist at Angel Broking said that Jio Platforms, with the fresh deal, has reaffirmed his conviction in the company's potential transformation to a digital play from a brick and mortar company.

"The company well on it’s way to achieve a net debt free status by raising Rs 1.7 lakh crore. through a combination of stake sale in Jio Platforms and rights issue which is leading to a rerating for the company.

Jio Platforms is a wholly-owned subsidiary of Reliance Industries, which has more than 388 million subscribers. The telecom firm has made significant investments across its digital ecosystem, powered by leading technologies spanning broadband connectivity, smart devices, cloud and edge computing, big data analytics, artificial intelligence, Internet of Things, augmented and mixed reality and blockchain.

Intel Capital invests globally in innovative companies with a focus on disruptive technology areas like cloud computing, artificial intelligence and 5G – opportunities where Jio is also innovating and investing for growth. Intel Capital is the investment arm of Intel Corporation. Intel has operated in India for more than two decades and today employs thousands of employees there with state-of-the-art design facilities in Bengaluru and Hyderabad.

"We are positive on Reliance Industries from a long term perspective as we believe that the digital and retail business will be key growth drivers for the company going forward. Potential listing of the digital and retail business over the next 3-5 years would also lead to significant value unlocking for shareholders in the long run. We also expect the hydrocarbon business to recover in the second half of the year as demand for petro products normalizes," Roy said.

Given no significant capex outlay in the near future, Roy said that the hydrocarbon segment should generate free cash flows which can be used to fund expansion in other businesses.


The shares of the company closed 1.53 per cent higher at Rs 1787.50 on BSE.