Reliance Jio set to sell 1% stake to PE firm Silver Lake at $65 Bn valuation

US-based private equity firm Silver Lake Partners has announced to buy a 1.15% stake in Jio Platforms for about $750 million (Rs 5,655.75 crore) at a valuation of $65 billion.

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 said in a joint statement to the media.

The deal will help reduce RIL’s debt, which has been increasing due to the expansion of Jio and other businesses.

The development comes soon after social media giant Facebook announced an investment of $5.7 billion for a 9.99% stake in Jio. The company also said that it has received strong interest from other strategic and financial investors and it may announce a similar-sized investment in the coming months.

Jio, the digital services unit of Mukesh Ambani-led Reliance Industries Limited, also handles Jio Infocomm as well as its news, movie and music apps along with other businesses.

On April 30, Reliance Industries said it will achieve zero net debt status soon. For the January-March quarter, Reliance Jio Infocomm's net profit tripled to Rs 2,331 crore, as compared to a year ago.

Revenue for the quarter came in at Rs 14,835 crore compared with Rs 11,715 crore in the previous year. As of March 2020, Jio’s subscriber base was at 387.5 million, a 26.3% YoY growth with ARPU during the quarter of Rs 130.6 per subscriber per month.

For the uninitiated, Silver Lake has around $40 billion in combined assets under management and has invested in global companies like Airbnb, Alibaba, Ant Financial, Alphabet’s Verily and Waymo, Dell, and Twitter.