Just weeks after Facebook announced that it is investing $5.7 billion in Reliance Jio for about 5.99 percent stake in the company, private equity firm Silver Lake has today announced that it will invest ₹5,655.75 crore (about $747 million) into Jio Platforms.
With this investment, Silver Lake will take around 1.15 percent stake in Reliance Jio. This gives the telecom operator a valuation of ₹5.15 lakh crore ($65 billion), which represents a premium of 12.5 percent over the value implied during the Facebook deal.
In a statement, Egon Durban, Silver Lake Co-CEO and Managing Partner, said: “Jio Platforms is one of the world’s most remarkable companies, led by an incredibly strong and entrepreneurial management team who are driving and actualising a courageous vision. They have brought extraordinary engineering capabilities to bear on bringing the power of low-cost digital services to a mass consumer and small businesses population. The market potential they are addressing is enormous, and we are honoured and pleased to have been invited to partner with Mukesh Ambani and the team at Reliance and Jio to help further the Jio mission.”
Silver Lake has about $40 billion in combined assets and committed capital. The private equity firm has made investments in several companies, including Garter, Ant Financials from Alibaba, Didi Chuxing, Unity, Skype, Expedia, AirBnB, among others.
Reliance Jio, in its ambition to become the leading telecom company in the Indian market, has accumulated a lot of debt. As of September 2019, Reliance Jio has a debt of more than ₹3 lakh crore or $40 billion. The new investments from Silver Lake and Facebook will Reliance with much needed cash to fulfil its promise to cut net debt to zero by March 2021.