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Silver Lake to buy stake worth Rs 5,655 in Reliance Jio platforms

Strategic and financial investors are to form 20 per cent of Jio Platform, half of which was already picked by Facebook.

Silver Lake to buy stake worth Rs 5,655 in Reliance Jio platforms

The latest investment in Reliance Jio comes several days after the social media giant Facebook Inc. announced to invest Rs 43,574 crore. (Photo by INDRANIL MUKHERJEE / AFP)

On the of world’s largest tech investors Silver Lake is going to invest Rs 5,655.75 crore in Jio Platforms for a 1.15 per cent stake at an equity value of Rs 4.90 lakh crore, the US-based firm announced on Monday.

The latest investment in Reliance Jio comes several days after the social media giant Facebook Inc. announced to invest Rs 43,574 crore in exchange of 9.99 per cent stake in billionaire Mukesh Ambani’s digital unit that houses India’s youngest but biggest telecom firm.

“Silver Lake will invest Rs 5,655.75 crore into Jio Platforms. This investment values Jio Platforms at an equity value of Rs 4.90 lakh crore and an enterprise value of Rs 5.15 lakh crore and represents a 12.5% premium to the equity valuation of the Facebook investment announced on April 22, 2020,” RIL and Jio in a joint statement said Monday.

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Strategic and financial investors are to form 20 per cent of Jio Platform, half of which was already picked by Facebook. Silver Lake is one of many investors that will be coming on board with the Indian telecom firm.

“Jio Platforms, a wholly-owned subsidiary of RIL, is a next-generation technology company building a digital society for India by bringing together Jio’s leading digital apps, digital ecosystems and India’s #1 high speed connectivity platform under one umbrella,” the statement said.

“Reliance Jio Infocomm Ltd, which provides connectivity platform to over 388 million subscribers, will continue to be a wholly-owned subsidiary of Jio Platforms.”

Commenting on this latest investment, Mukesh Ambani, Chairman and Managing Director, Reliance Industries Ltd, welcomed Silver Lake saying, ”I am delighted to welcome Silver Lake as a valued partner in continuing to grow and transform the Indian digital ecosystem for the benefit of all Indians.”

“Silver Lake has an outstanding record of being a valuable partner for leading technology companies globally. Silver Lake is one of the most respected voices in technology and finance. We are excited to leverage insights from their global technology relationships for the Indian Digital Society’s transformation,” he added.

Egon Durban, Silver Lake Co-CEO and Managing Partner, said, “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 … .”

With approximately USD 40 billion in combined assets under management and committed capital and a singular focus on the world’s great tech and tech-enabled opportunities, Silver Lake is the global leader in large-scale technology investing. Its investments have included Airbnb, Alibaba, Ant Financial, Alphabet’s Verily and Waymo units, Dell Technologies, Twitter and numerous other global technology leaders.

The statement further read, “in the wake of the severe economic disruptions caused by the COVID-19 pandemic, globally and especially within India, this partnership with one of the most renowned tech-investors globally, Silver Lake, has special significance,” the statement said.

The transaction is subject to regulatory and other customary approvals.

Morgan Stanley acted as financial advisor to Reliance Industries and AZB & Partners and Davis Polk & Wardwell acted as legal counsels.

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