Intel’s investment valued Jio Platforms at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore.
Intel Capital is the latest global investor to have acquired a stake in Jio Platforms. Reliance Industries (RIL) on Friday announced that Intel Capital had picked up a 0.39% stake in its digital platforms company for an investment of Rs 1,894.50 crore. With this, RIL has raised a total of Rs 1,17,588.45 crore through 12 deals in over two months, by selling 25.09% stake in Jio Platforms to technology giants like Facebook and several big private equity investors and sovereign wealth funds. These include Silver Lake, Vista Equity Partners, General Atlantic, KKR, ADIA and TPG. A similar amount was invested by L Catterton just weeks ago in Jio Paltforms.
Intel’s investment valued Jio Platforms at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore. In all these deals, the company would issue fresh shares to the investors. The deal further strengthened parent RIL’s target of becoming zero-debt company well ahead of March 2021.
RIL’s net debt currently stands at Rs 1.6 lakh crore and the company has also raised Rs 53,124 crore from a rights issue. According to analysts, the rights issue and stake sales in Jio have enabled RIL to effectively become debt-free.
Intel Capital is the investment arm of semiconductor industry leader Intel Corporation and invests in innovative companies globally, with a focus on disruptive technology areas like cloud computing, artificial intelligence and 5G opportunities.
Jio Platforms, a wholly-owned subsidiary of RIL, is focusing on next-generation technologies. The chief company under its umbrella is Reliance Jio Infocomm, which has 388 million mobile subscribers.
RIL chairman and managing director Mukesh Ambani said, “Intel Capital has an outstanding record of being a valuable partner for leading technology companies globally. We are, therefore, excited to work together with Intel to advance India’s capabilities in cutting-edge technologies that will empower all sectors of our economy and improve the quality of life of 1.3 billion Indians.”
Wendell Brooks, president of Intel Capital, said, “Through this investment, we are excited to help fuel digital transformation in India, where Intel maintains an important presence.”
The transaction is subject to Indian regulatory and other customary approvals. Morgan Stanley acted as financial advisor to RIL and AZB & Partners and Davis Polk & Wardwell acted as legal counsels.