With Saudi’s PIF, Jio closes 11th deal to raise Rs 1.15L crore

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June 19, 2020 8:49 AM

A similar amount had been invested by private equity funds Vista Equity Partners and KKR just weeks ago. This investment values Jio Platforms at an equity value of Rs 4.91 lakh crore.

Mukesh Ambani, Reliance Industries, RIL, Reliance industries stock, Reliance industries rights issue, ril share price, Reliance facebook deal, jio facebook deal, Jio facebook, facebook jio, saudi arabi, pif, public investment fund, jio investment, pif jio, saudi arabi jio investmentJio Platforms is a wholly-owned subsidiary of RIL. (Image: Reuters)

Shares of Reliance Industries hit a new high on Thursday as the company announced yet another investment in Jio Platforms. Saudi Arabia’s Public Investment Fund is the latest to pick up 2.3% in Jio Platforms for Rs 11,367 crore. Jio Platforms has raised a total of Rs 1,15,693 crore through 11 deals in the last two months by selling 24.7% stake to technology giants like Facebook and several big private equity investors and sovereign wealth funds, which include Silver Lake, Vista Equity Partners, General Atlantic, KKR, ADIA and TPG, among others.

A similar amount had been invested by private equity funds Vista Equity Partners and KKR just weeks ago. This investment values 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 will issue fresh shares to the investors. It further strengthens parent Reliance Industries’ (RIL) target of becoming a zero-debt company 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.

PIF is the sovereign wealth fund of Saudi Arabia and as part of its mandate to diversify its economy, has made its largest investment into the Indian economy to date. This investment is in line with PIF’s strategy and mandate of investing in sectors and companies that generate long-term commercial returns to drive Saudi Arabia’s economic transformation, as part of Vision 2030 objectives. This investment supports PIF’s mandate of building strong global investment partnerships to further Saudi Arabia’s investment reach and exposure.

Jio Platforms is a wholly-owned subsidiary of RIL, focusing on next-generation technologies, and the chief company under its umbrella is Reliance Jio Infocomm, which has 388 million mobile subscribers.

Mukesh Ambani, chairman and managing director, Reliance Industries, said, “We at Reliance have enjoyed a long and fruitful relationship with the Kingdom of
Saudi Arabia for many decades. From Oil Economy, this relationship is now moving to strengthen India’s New Oil (Data-driven) economy, as is evident from PIF’s investment into Jio Platforms”.

Yasir Al-Rumayyan, governor of PIF, said, “We believe that the potential of the Indian digital economy is very exciting and that Jio Platforms provides us with an excellent opportunity to gain access to that growth. This investment will also enable us to generate significant long term commercial returns for the benefit of Saudi Arabia’s economy and our country’s citizens, in line with our mandate to safeguard and grow the national wealth of the Kingdom.”

The transaction is subject to Indian regulatory and other customary approvals. Shares of RIL rose 2.5% on Thursday to hit an all-time high of Rs 1,656.25 on the BSE. The stock has surged a whopping 89.2% from its march lows. The market cap of the company also breached Rs 11 lakh crore in intra-day trade on Thursday, before settling at Rs 10.81 lakh crore.

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