Reliance Industries Ltd (RIL) on Sunday said New York-based private equity giant General Atlantic will invest ₹6,598.38 crore in its digital assets subsidiary, Jio Platforms Ltd.
The deal, which comes just two days ahead of the launch of RIL’s ₹53,000-crore rights issue, will see General Atlantic pick up a 1.34% stake in Jio Platforms, valuing the company at ₹4.91 trillion.
With the latest deal, Jio Platforms has raised ₹67,194.75 crore from marquee tech investors, such as Facebook, Silver Lake, Vista Equity Partners and General Atlantic, in less than a month.
RIL said the deal with General Atlantic gives Jio Platforms an enterprise value of ₹5.16 trillion.
On 11 May, Mint reported that the PE firm could invest around ₹10,000 crore to buy a 2% stake in Jio Platforms.
“I am thrilled to welcome General Atlantic, a marquee global investor, as a valued partner. I have known General Atlantic for several decades and greatly admired it for its belief in India’s huge growth potential,” said Mukesh Ambani, chairman and managing director, RIL. “General Atlantic shares our vision of a digital society for India and strongly believes in the transformative power of digitization in enriching the lives of 1.3 billion Indians. We are excited to leverage General Atlantic’s proven global expertise and strategic insights across 40 years of technology investing for the benefit of Jio.”
Market experts said RIL’s strategy to raise funds through a flurry of stake sales is primarily aimed at building confidence among potential investors for its mega rights issue amid a volatile equity market during the covid-19 crisis.
On 30 April, RIL said it will raise ₹53,125 crore through a 1:15 rights issue (one new share for every 15 shares held) at an offer price of ₹1,257 apiece. The issue is set to open on 20 May.
Due to the uncertainties, RIL will allow subscribers to buy the rights issue shares by only making a part payment now and the rest later. This will buy RIL promoters more time to bring in enough money to fully subscribe to the rights issue. Shareholders willing to subscribe to the rights issue will have to pay 25% on application and the rest in one or more tranches. With 50% shareholding, RIL’s promoter group led by Ambani will need ₹26,600 crore to subscribe to its portion of the rights issue.
News Source: Livemint