Reliance Jio to sell 2.32% stake to PE firm Vista Equity for Rs 11,367 Cr

Indian telecom giant Reliance Jio has announced that it will sell a 2.32% stake to US-based private equity firm Vista Equity on a fully diluted basis for Rs 11367 crore.

The deal would value Jio at an equity value of Rs 4.91 trillion and an enterprise value of Rs 5.16 trillion.

Commenting on the deal, Chairman and Managing Director Mukesh Ambani said, “Like our other partners, Vista also shares with us the same vision of continuing to grow and transform the Indian digital ecosystem for the benefit of all Indians”.

Similar to the Silver Lake deal, Vista’s investment is also at a 12.5% premium over the Facebook deal announced in April. Following the deal, Jio Platforms has now raised Rs 60,596.37 crore from leading technology investors in less than three weeks. 

While Facebook acquired a 9.9% stake in the Indian telecom giant Reliance Jio for Rs 43,574 crore or $5.7 billion two weeks back, US-based private equity firm Silver Lake Partners 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.

These deals will help reduce RIL’s debt, which has been increasing due to the expansion of Jio and other businesses. It had reported total debt of nearly Rs 1,450 crore in FY19 and was expected to reach more than Rs 1,700 crore by the end of FY 2021. 

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.

Vista is a global investment firm that holds more than $57 billion in cumulative capital commitments and its global network of companies collectively and represents the fifth-largest enterprise software company in the world. Jio marks Vista’s first sizable investment in India.