Private equity firm Silver Lake to invest Rs 5,655.75 crore in Reliance Jio Platforms

US private equity firm Silver Lake will invest Rs 5,655.75 crore ($747 million) in Jio Platforms for a 1.15% stake, the second deal after Facebook’s share acquisition plan less than two weeks ago. Analysts expect more such stake sales going forward and indicate an initial share sale for the digital unit of Reliance Industries (RIL) in about two years.

The Silver Lake deal assesses Jio Platforms at “an equity value of Rs 4.9 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,” Reliance and Jio Platforms said in a joint statement on Monday. The companies didn’t specify the quantum of stake to be sold, but people familiar with the matter put it at 1.15%.

“Silver Lake has an outstanding record of being a valuable partner for leading technology companies globally… We are excited to leverage insights from their global technology relationships,” RIL chairman Mukesh Ambani said in the statement.


Silver Lake, based in Menlo Park, California, has $40 billion in combined assets under management and committed capital. It has invested in companies including Airbnb, Alibaba, Ant Financial, Alphabet’s Verily and Waymo units, Dell Technologies and Twitter. “They (Jio Platforms) have brought extraordinary engineering capabilities to bear on bringing the power of low-cost digital services to a mass consumer and small businesses population,” said Egon Durban, managing partner, Silver Lake.

External Investors to Hold 11.14%
“The market potential they are addressing is enormous,” Durban said.

The latest stake sale is subject to regulatory and other approvals and means Jio Platforms will have external investors holding an 11.14% stake, experts said.

Facebook said on April 22 it would invest $5.7 billion in Jio Platforms for a 9.99% stake. Reliance followed that with the announcement of a Rs 53,125 crore rights issue last week, when it also spoke about more Facebook-like deals in the offing.

Analysts said such steps will help the Indian oil-to-telecom conglomerate reduce net debt to zero by its stated timeline of March 31, 2021.

Jio Platforms, a wholly owned subsidiary of Reliance, comprises mainly its telecom business under Reliance Jio Infocomm, which is the largest in the country with over 388 million subscribers. Reliance’s other digital properties and investments such as Jio Cinema, Jio Saavn and Haaptik are housed under Jio Platforms.

Reliance shares fell 2.16% to Rs 1,435.40 at the close on the BSE, while the benchmark Sensex declined 5.9%.

According to Rajiv Sharma, head of research at SBICap Securities, Reliance is likely to look at further equity dilution in Jio Platforms. “Now that they are getting financial investors, it is safe to say that Jio will go for an IPO some two years down the line,” said Sharma. He said the markets had earlier looked at only a telecom play, but now there is an “acknowledgement value of the digital part.”

Moody’s Investors Service said the investment reinforces the company’s commitment to achieving a zero-net debt position. It said the recent fund-raising moves could reduce net debt by about $13.6 billion from the level of $21.4 billion reported on March 31.

“This (Jio-Silver Lake deal) is credit-positive as it enhances RIL’s already strong financial flexibility, including the recently announced rights issue ($7 billion) and investments by Facebook,” Vikas Halan, senior vice president (corporate finance) at Moody’s, said in a statement. The valuation also establishes another pricing benchmark for Jio Platforms.