Silver Lake to invest Rs 5,655.75 crore in Jio Platforms
Mumbai, May 4, 2020
Silver Lake, a global leader in large-scale technology investing, will invest Rs 5,655.75 crore in Jio Platforms, a wholly-owned subsidiary of the Mukesh Ambani-led Reliance Industries Limited (RIL), an announcement said here this morning.
The announcement by RIL and Jio Platforms said that the investment values Jio Platforms at an equity value of Rs 4.90 lakh crore and an enterprise value of Rs 5.15 lakh crore.
It represents a 12.5% premium to the equity valuation of the Facebook investment of Rs 43.574 crore in Jio Platforms announced on April 22, 2020.
That investment by Facebook valued Jio Platforms at Rs. 4.62 lakh crore pre-money enterprise value ($65.95 billion, assuming a conversion rate of Rs 70 to a US dollar). Facebook’s investment would translate into a 9.99% equity stake in Jio Platforms on a fully diluted basis.
The Facebook investment was the largest for a minority stake by a technology company anywhere in the world and the largest FDI in the technology sector in India.
Jio Platforms is a next-generation technology company building a Digital Society for India by bringing together Jio’s leading digital apps, digital ecosystems and India’s number one high speed connectivity platform under one umbrella. It has built a world-class all-IP data strong future proof network with latest 4G LTE technology through its wholly-owned subsidiary, Reliance Jio Infocomm Limited.
Reliance Jio Infocomm, which provides connectivity platform to over 388 million subscribers, will continue to be a wholly-owned subsidiary of Jio Platforms.
"Jio’s vision is to enable a Digital India for 1.3 billion people and businesses throughout India, especially small merchants, micro-businesses and farmers. Jio has brought transformational changes in the Indian digital services space and propelled India on the path towards becoming a global technology leader and among the leading digital economies in the world," a press release from the company said.
"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. Comprehensive digitisation will be a vital component of the revitalisation of the Indian economy. It is our strong conviction that no one should be deprived of the tremendous new opportunities, including those for new employment and new businesses, embedded in India’s 360-degree digital transformation," it said.
With approximately $40 billion in combined assets under management and committed capital and a singular focus on the world’s great tech and tech-enabled opportunities, Silver Lake is the global leader in large-scale technology investing.
Its mission is to build and grow great companies by partnering with world-class management teams. Its investments have included Airbnb, Alibaba, Ant Financial, Alphabet’s Verily and Waymo units, Dell Technologies, Twitter and numerous other global technology leaders.
"This investment by Silver Lake is further testament to the world-class digital platform that Jio has built, powered by leading technologies, such as Broadband connectivity, Smart Devices, Cloud and Edge Computing, Big Data Analytics, Artificial Intelligence, Internet of Things, Augmented and Mixed Reality and Blockchain," the release said.
Commenting on the transaction with Silver Lake, Mukesh Ambani, Chairman and Managing Director, Reliance Industries Ltd, said, “I am delighted to welcome Silver Lake as a valued partner in continuing to grow and transform the Indian digital ecosystem for the benefit of all Indians. Silver Lake has an outstanding record of being a valuable partner for leading technology companies globally. 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.”
Egon Durban, Silver Lake Co-CEO and Managing Partner, said, “Jio Platforms is one of the world’s most remarkable companies, led by an incredibly strong and entrepreneurial management team who are driving and actualizing a courageous vision. They have brought extraordinary engineering capabilities to bear on bringing the power of low-cost digital services to a mass consumer and small businesses population. The market potential they are addressing is enormous, and we are honored and pleased to have been invited to partner with Mukesh Ambani and the team at Reliance and Jio to help further the Jio mission.”
The transaction is subject to regulatory and other customary approvals, the release said.
Morgan Stanley acted as financial advisor to Reliance Industries and AZB & Partners and Davis Polk & Wardwell acted as legal counsels.