Vista Equity Partners, a private equity company, announced it would spend $1.5 billion in Reliance Jio Platforms on Friday, joining social conglomerate Twitter and private equity group Silver Lake, which has both taken bets on the Indian telecom giant in recent weeks.
The expected launch, which will give the U.S .- headquartered software-focused buyout company Vista Equity Partners a 2.32 percent interest in Reliance Jio Platforms, rates India’s largest telecom provider at $65 billion (equity valuation)—the same value indicated by the Silver Lake investment and a 12.5 percent premium on Facebook’s offer, the Indian company said.
Reliance Jio Platforms has revealed plans in the past three weeks to sell about 13.4 percent of the firm’s shares to Google, Silver Lake, and Vista Equity Partners for about $8bn.
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Reliance Jio Platforms, which began its commercial service in the second half of 2016, brought the local telecommunications sector to a halt by providing a range of 4 G services and voice calls at discounted rates. Jio Services, a subsidiary of Reliance Industries (India’s most valued firm by market value), has accrued 388 million subscribers since its launch to become the nation’s largest telecom operator.
Reliance Industries said on Friday that it aims to make Jio Platforms, in which it has poured over $30 billion over the years, “a global technology leader and one of the world’s top digital businesses.” Vista, who is going ahead investing in software companies 20 years ago and cut controls on more than three dozen companies, said it would explore ways to expand the reach of its portfolio. Vista said some of its portfolio companies already have a significant presence in India, the world’s second-largest internet market.
The new pledge will help Ambani, India’s richest man; further reinforce his promise to investors last year when he said he planned to slash Reliance’s net debt by early 2021 from around $21 billion to nothing. During the coronavirus outbreak, its core business, oil refining, and petrochemicals were hit hard. Its net income fell by 37 percent in the quarter ended March 31.
In last month’s earnings call from the firm, Ambani said several companies had shown interest in buying stakes in Jio Platforms in the aftermath of the Facebook sale.
Facebook said it will partner with the Indian giant on a variety of areas beginning with e-commerce rather than providing money to Jio Sites for a 9.99 percent stake in the venture. Days later, JioMart, an e-commerce venture run by India’s most valued company, started testing an “ordering system” on WhatsApp, India’s most popular smartphone app with over 400 million active users on the world’s second-largest internet market.