Within days of Facebook’s Rs 43,574 crore deal, Silver Lake – one of the world’s largest tech investors – on Monday agreed to invest Rs 5,655.75 crore to buy a 1.15 per cent stake in billionaire Mukesh Ambani’s digital unit that houses India’s youngest but biggest telecom firm.
The investment in Jio Platforms is at a 12.5 per cent premium to the Facebook deal and more such strategic and financial investments are likely to be made going ahead.
“Silver Lake will invest Rs 5,655.75 crore into Jio Platforms,” Reliance said in a statement. “This investment values Jio Platforms at an equity value of Rs 4.90 lakh crore and an enterprise value of Rs 5.15 lakh crore and represents a 12.5 per cent premium to the equity valuation of the Facebook investment announced on April 22, 2020.”
Facebook had bought a 9.99 per cent stake in Jio Platforms for USD 5.7 billion (Rs 43,574 crore) at an enterprise value of Rs 4.62 lakh crore.
Strategic and financial investors are to form 20 per cent of Jio Platform, half of which was picked by Facebook. Silver Lake is one of the investors and more such investments are likely.
“Jio Platforms, a wholly-owned subsidiary of RIL, is a next-generation technology company building a digital society for India by bringing together Jio’s leading digital apps, digital ecosystems and India’s #1 high speed connectivity platform under one umbrella,” the statement said.
“Reliance Jio Infocomm Ltd, which provides connectivity platform to over 388 million subscribers, will continue to be a wholly-owned subsidiary of Jio Platforms.”
With approximately USD 40 billion in combined assets under management and committed capital and a singular focus on the world’s great tech and tech-enabled opportunities, Silver Lake is the global leader in large-scale technology investing. Its investments have included Airbnb, Alibaba, Ant Financial, Alphabet’s Verily and Waymo units, Dell Technologies, Twitter and numerous other global technology leaders.
“In the wake of the 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,” the statement said.
Commenting on the transaction with Silver Lake, Mukesh Ambani, Chairman and Managing Director, Reliance Industries Ltd, said, “I am delighted to welcome Silver Lake as a valued partner in continuing to grow and transform the Indian digital ecosystem for the benefit of all Indians.
“Silver Lake has an outstanding record of being a valuable partner for leading technology companies globally. Silver Lake is one of the most respected voices in technology and finance. We are excited to leverage insights from their global technology relationships for the Indian Digital Society’s transformation.”
Commenting on the investment, Egon Durban, Silver Lake Co-CEO and Managing Partner, said, “Jio Platforms is one of the world’s most remarkable companies, led by an incredibly strong and entrepreneurial management team who are driving and actualizing a courageous vision.
“They have brought extraordinary engineering capabilities to bear on bringing the power of low-cost digital services to a mass consumer and small businesses population. The market potential they are addressing is enormous, and we are honoured and pleased to have been invited to partner with Mukesh Ambani and the team at Reliance and Jio to help further the Jio mission.”
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The transaction is subject to regulatory and other customary approvals.
Morgan Stanley acted as financial advisor to Reliance Industries and AZB & Partners and Davis Polk & Wardwell acted as legal counsels.