India’s Reliance picks its third billion-dollar deal in two weeks

Mumbai: India’s Reliance Industries announced a $1.5 billion stake sale in digital unit Jio Platforms – a third deal in a little over two weeks that will inject a combined $8 billion in the telecoms-to-energy group to help it pare debt.

Private equity firm Vista Equity Partners is buying a 2.3 per cent stake in Jio Platforms, the unit that houses Reliance’s telecoms venture Jio Infocomm, for Rs113.67 billion ($1.5 billion), Reliance said in a statement. The investment gives Jio Platforms an equity value of Rs4.91 trillion and an enterprise value of Rs5.16 trillion rupees, said Reliance, which is controlled by billionaire tycoon Mukesh Ambani.

The deal comes after Reliance cut a $5.7 billion deal with Facebook for a 9.99 per cent stake in Jio Platforms on April 22, and just days after it secured a $750 million investment from private equity firm Silver Lake. The deals, along with its plan to sell $7 billion in new shares, will help Reliance meet its target of eliminating $21.4 billion of net debt by the end of the year.

Betting all on mobile

Unlike traditional mobile carriers which depend on voice services to make money, Ambani has pitched Jio as a trailblazer tech company by offering cheap mobile data plans that helped hundreds of millions of Indians use the internet for the first time.

Ambani is set to roll out a new retail venture, which combined with Jio and interests in education, music and films, could pose a challenge to established e-commerce firms such as Amazon and Walmart’s Flipkart.

The investments by Facebook, and private equity firms such as Vista and Silver Lake, which primarily fund tech platforms and not telecoms carriers, will further cement Jio Platforms’ position as a consumer-tech company, brokerage Axis Capital said in a note to clients. These “deals are just a start and we expect many such marquee deals in the next 1-2 years, as this route provides much needed capital and advanced technologies,” the note added.