U.S. private equity firm Silver Lake has agreed to invest ₹5,655.75 crore in Jio Platforms Ltd., representing a 12.5% premium to the equity valuation of the Facebook investment announced on April 22, 2020.
Jio Platforms is a wholly owned subsidiary of Reliance Industries and brings together Jio’s digital apps, digital ecosystems and high-speed connectivity platform under one umbrella.
Reliance Jio Infocomm Ltd., which provides connectivity platform to more than 388 million subscribers, will continue to be a wholly owned subsidiary of Jio Platforms.
Commenting on the deal, Mukesh Ambani, CMD, RIL, said, “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.”
With approximately $40 billion in combined assets under management Silver Lake’s investments include Airbnb, Alibaba, Ant Financial, Alphabet’s Verily and Waymo units, Dell Technologies, Twitter and numerous other global technology firms.
Asked for comments, Utkarsh Sinha, MD, Bexley Advisors, a boutique investment bank firm told The Hindu, “The Silver Lake investment comes at a 12.5% premium to the Facebook investment made just weeks ago, signalling that the Facebook investment gave a positive boost to Jio, and that the company is likely to see higher valuations going forward.
“Silverlake is not a shy investor as it backs strong companies even in adverse environments, like the post-COVID crisis we are confronting now. At the same time, Silverlake is an exit-focused investor, In the Skype transaction, Silverlake netted close to 3 times returns on their initial $1.9 billion investment.”
“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,” RIL said in a statement.