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At a Glance: Jio's stake sale

By ASHISH NARSALE and ASLAM HUNANI
August 24, 2020 08:52 IST
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Jio Platforms is expected to use its 388 million mobile phone subscribers as the cornerstone of an e-commerce and digital services business to rival Amazon and Walmart's Flipkart.

Illustration: Dominic Xavier/Rediff.com

On July 15, 2020, Google agreed to invest Rs 33,737 crore (Rs 337.37 billion) for a 7.7% stake in Jio, Reliance Industries's technology venture, and to cooperate on technology initiatives, including development of affordable smartphones.

Jio also revealed that it secured Rs 730 crore (Rs 7.3 billion) from wireless technology leader Qualcomm by selling a small stake in its technology venture, adding to a slew of investments since April that has crossed Rs 1.18 lakh crore.

'Qualcomm Ventures' investment will translate into a 0.15 per cent equity stake in Jio Platforms on a fully diluted basis,' the company said in a statement.

With this deal, Reliance has sold 32.97% stake in Jio Platforms Ltd -- the unit that houses India's youngest but largest telecom firm Jio Infocomm and apps.

In total, Jio has raised Rs 1,52,055.45 crore.

Qualcomm, which is the 12th marquee firm to have set a sight on India's hottest digital play in as many weeks, values Jio Platforms at Rs 4.91 lakh crore, the statement said.

Proceeds from the stake sales in Jio Platforms along with the Rs 53,124 crore (Rs 531.24 billion) raised in a rights issue in June and from sale of a 49% stake in its fuel retail network to BP last summer for Rs 7,000 crore (Rs 70 billion), will help the company become net debt-free, Reliance announced last month, once the promised funds come in (75% of the funds from the rights issue will come in next year).

As of March, Reliance had a net debt of over Rs 1.6 lakh crore.

The Jio Platforms deal spree began on April 22 when social networking giant Facebook agreed to acquire a 9.9% stake for Rs 43,573.62 crore (Rs 435.73 billion).

Since then, six US private equity firms invested in Jio: Silver Lake Partners bought a 2.08% stake for Rs 10,202.55 crore (Rs 102.02 billion), Vista Equity Partners paid Rs 11,367 crore (Rs 113.67 billion) for a 2.32% stake, General Atlantic acquired a 1.34% stake for Rs 6,598.38 crore (Rs 65.98 billion), KKR paid Rs 11,367 crore (REs 113.67 billion) for a 2.32% stake, TPG bought a 0.93% stake for Rs 4,546.80 crore (Rs 45.46 billion) and L Catterton picked up 0.39% for Rs 1,894.50 crore (Rs 18.94 billion).

The investment arm of computer chip giant Intel Corp picked up a 0.39% stake for Rs 1,894.50 crore (Rs 18.94 billion).

Jio Platforms has also received a funds from the Middle East which started with Mubadala Investment Co which picked up a 1.85% stake for Rs 9,093.60 crore (Rs 90.93 billion) and was followed by Saudi Arabia's sovereign wealth fund, the Public Investment Fund, buying a 2.32% stake for Rs 11,367 crore (Rs 113.67 billion). The Abu Dhabi Investment Authority picked a 1.16% stake for Rs 5,683.50 crore (Rs 56.83 billion).

Jio Platforms -- which is amassing a wide range of services from music streaming to online retail and payments -- is expected to use its 388 million mobile phone subscribers as the cornerstone of an e-commerce and digital services business to rival Amazon and Walmart's Flipkart.

Jio has become Reliance's growth engine, combining with the company's fast-growing retail arm to help in offsetting the decline in oil and petrochemicals.

Please click to check Reliance Jio's total stake sale at a glance:

 

Information: PTI

Feature Presentation: Ashish Narsale/Rediff.com and Aslam Hunani/Rediff.com

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ASHISH NARSALE and ASLAM HUNANI
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