Marquee equity investor Vista buys stake in Reliance Jio
In the third major deal in as many weeks, Reliance has announced the sale of 2.32% of stake in Jio to American private equity firm Vista Equity Partners.
After Facebook and Silver Lake, American tech-equity firm Vista will be investing Rs 11,367 crore in Jio for a 2.32% stake in the platform. This deal values the Jio unit – comprising mainly its telecom business but also other digital properties like Jio Cinema, Saavn, etc. – at Rs 4.91 lakh crore, while the enterprise value is Rs 5.16 lakh crore.
The three deals have pumped in Rs 60,596 crore into the company in the past month. On April 22, Facebook had invested Rs 43,574 crore for 9.99% of the company while private equity firm Silver Lake gave Rs 5,655 for a 1.15% stake on May 4. While Vista has a significant presence in India, this is its first single large investment in the country. The two-decade-old tech-focused investment firm has over $57 billion in capital commitments and history of exclusively investing in enterprise software and technology companies.
The slew of deals highlights the confidence global investors have in Reliance’s understanding of the Indian market. With 388 million subscribers, the company has been credited with bringing a big chunk of first-time internet users online through their mobile phones in the past five years. It is obviously the analyst and speculators expect even more rapid digitisation of the country is the post-COVID world. In addition to this, Jio is poised to bring into play tools like Artificial Intelligence, Big Data and Augmented and Virtual Reality for a large captive audience.
Commenting on the transaction with Vista, Mukesh Ambani, chairman and managing director, Reliance Industries Ltd, said he was delighted to welcome Vista, one of the world’s marquee tech investors globally as a valued partner. “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. They believe in the transformative power of technology to be the key to an even better future for everyone.”
Commenting on the investment, Robert F Smith, founder, chairman and CEO of Vista, said, “We believe in the potential of the Digital Society that Jio is building for India. Mukesh’s vision as a global pioneer, alongside Jio’s world-class leadership team, have built a platform to scale and advance the data revolution it started. We are thrilled to join Jio Platforms to deliver exponential growth in connectivity across India, providing modern consumer, small business and enterprise software to fuel the future of one of the world’s fastest-growing digital economies.”
Morgan Stanley acted as financial advisor to Reliance Industries and AZB & Partners and Davis Polk & Wardwell acted as legal counsels. Kirkland & Ellis LLP and Shardul Amarchand Mangaldas & Co served as legal counsels to Vista. The transaction is subject to regulatory and other customary approvals.