Intel arm invests ₹1,894.5 cr in Jio, foreigners now own a quarter of RIL unit2 min read . Updated: 03 Jul 2020, 08:32 AM IST
- There are now 11 foreign investors in Jio Platforms who collectively own 25.09% stake in RIL subsidiary
- The latest transaction gives Jio Platforms an equity valuation of ₹4.91 trillion and an enterprise value of ₹5.16 trillion
NEW DELHI: Intel Capital will invest ₹1,894.50 crore in Jio Platforms, the Mukesh Ambani company said in a statement on Friday. Intel Capital is the investment arm of US-based semiconductor giant. Intel is the eleventh foreign investor in the in the Reliance Industries subsidiary since 22 April when Jio’s first deal – one with Facebook – was announced.
Facebook had bought a 9.99% stake in Jio for ₹43,573.62 crore, a deal that the antitrust watchdog approved on 24 June.
With the Intel deal, the Ambani firm has so far raised ₹1.17 trillion from 11 investors in 12 deals in less than 11 weeks. They now own 25.09% stake in the company. Silver Lake Partners, one of the 11 investors, had invested in two tranches.
The latest transaction gives Jio Platforms an equity valuation of ₹4.91 trillion and an enterprise value of ₹5.16 trillion, the same as most of the deals have taken place at. On Thursday on the BSE, RIL share closed at ₹1,760.55, up 1.3% from Monday’s close.
Other investors in Jio include TPG, KKR, L Catterton, General Atlantic, Vista Equity Partners, two sovereign wealth funds from Abhu Dhabi -- Abu Dhabi Investment Authority and Mubadala – and one from Saudi Arabia – Public Investment Fund.
Reliance Jio Infocomm, which provides connectivity platform to over 388 million subscribers, will continue to be a wholly-owned subsidiary of Jio Platforms.
The stake sales were part of RIL's plan to be debt-free by March, a target India’s largest company on 19 June said it had already achieved, the first 11 deals helping it achieve that. However, analysts have pointed out that the feat hasn’t been achieved yet though the conglomerate remains on course to do so within a year as the money from the deals flows in.
It is also a possibility that RIL may choose not to repay its entire debt even as it becomes debt-free at net level which basically having higher cash and cash equivalents than the debt on the books.
According to a 21 June Mint report, analysts at CLSA, Bernstein, Kotak Institutional Equities, Goldman Sachs and Nomura pegged the company’s net liabilities at between Rs2.4 trillion and Rs2.6 trillion in FY20.
They include deferred spectrum liabilities and capex creditors to arrive at their estimate of net debt. Some analysts also add debt transferred to the fibre investment trust (InvIT) and end up with an even higher net liabilities figure.
The company had raised ₹53,124 crore via a rights issue that closed 4 June. Three-fourths of the proceeds from the rights issue will be received only in the next financial year. A stake sale to BP for the petro-retail joint venture is expected to conclude in the current financial year and bring in about ₹7,000 crore to the kitty.
The Mint report said if the $15 billion deal with Saudi Aramco concludes and the company manages to tie in a sponsor for the fibre InvIT, it can end up being debt-free even in the books of analysts and rating agencies.