Reliance Jio: Silver Lake comes back for more, invests another Rs 4546 crore in Jio Platforms

Silver Lake and co-investors will pump another Rs 4,546.8 crore in Jio Platforms, the second investment by the private equity giant in the Reliance Industries digital unit in a skosh over a month and the second such deal in less than 24 hours.

The deal adds to a pile of funds raised by Jio in recent months and comes close on the heels of Abu Dhabi sovereign fund Mubadala Investment Company injecting Rs 9,093.6 crore on June 4.

With the latest investment, Jio Platforms has raised Rs 92,202.15 crore in exchange for a 19.9 percent stake from some of the world’s leading technology investors, led by Facebook Inc, in less than six weeks.  The total investment by Silver Lake and its co-investors in Jio Platforms, which runs movie, news and music apps as well as the telecom enterprise Jio Infocomm, is now Rs 10,202.55 crore.

Silver Lake’s investment values Jio Platforms at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore, and will translate into a 2.08 percent equity stake in the digital assets company, RIL said in a statement on June 5.

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On May 4, 2020, Silver Lake, the world’s largest tech investor, invested Rs 5,655.75 crore in Jio. In all, Jio has secured seven big investments in six weeks.

The series of deals was led by Facebook, which invested Rs 43,574 crore to buy 9.99 percent on April 22.  Since then, General Atlantic, Silver Lake, Vista Equity Partners, KKR and Mubadala have spent money on Jio.

Commenting on the aggregate investment brought by Silver Lake, Mukesh Ambani, chairman and managing director, Reliance Industries Ltd, said Silver Lake and its co-investors are valued partners as his company continues to grow and transform the Indian digital ecosystem for the benefit of all Indians. “We are pleased to have their confidence and support, as well as the benefit of their leadership in global technology investing and their valued network of relationships, as we drive the Indian Digital Society’s transformation. I would like to emphasise that Silver Lake’s additional investment in Jio Platforms, within a span of five weeks during the COVID-19 pandemic, is a strong endorsement of the intrinsic resilience of the Indian economy, which will surely grow bigger with comprehensive digital enablement.”

Egon Durban, Silver Lake Co-CEO and managing partner, said they were excited to increase the exposure and bring more of their co-investors into this opportunity, further supporting Jio Platforms in its mission to bring the power of high-quality and affordable digital services to a mass consumer and small businesses population. “The investment momentum behind Jio validates a compelling business model and underscores our admiration for Mukesh Ambani, his team and their courageous vision in creating and building one of the world’s most remarkable technology companies.”

Silver Lake is the world’s largest tech investor and has a terrific track record of investing in some of the largest and successful tech companies globally such as Twitter, Airbnb, Alibaba, Dell Technologies, ANT Financials, Twitter, Alphabet’s Waymo and Verily, among others.

Silver Lake made its debut investment in India in 2013 when it picked up a minority stake in Bangalore based Ekta Software which builds software for commodity trading.

The firm was launched in 1999 as a specialist firm focused on technology company investments.

The transaction is subject to regulatory and other customary approvals.

Morgan Stanley acted as financial advisor to Reliance Industries and AZB & Partners and Davis Polk & Wardwell acted as legal counsels. Latham & Watkins LLP, Shardul Amarchand Mangaldas & Co and Simpson Thacher & Bartlett LLP acted as legal counsels to Silver Lake.

(Disclaimer: Reliance Industries Ltd., which also owns Jio, is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd)