Reliance raises 8 Billion Dollars in two weeks as it conducts third unit stake deal By CIOReviewIndia Team

Reliance raises 8 Billion Dollars in two weeks as it conducts third unit stake deal

CIOReviewIndia Team | Friday, 08 May 2020, 13:03 IST

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Reliance raises 8 Billion Dollars in two weeks as it conducts third unit stake deal

Today, India’s Reliance Industries Ltd (RELI.NS) announced a 1.5 Billion Dollar stake sale in digital unit Jio Platforms. This deal carried out will direct a total of 8 billion Dollars in the telecom-to-energy group thus diminishing its debt.

Vista Equity Partners, a private equity firm, has bought a 2.3 percent stake in Jio Platforms thus giving Jio Platforms an equity value of 4.9 trillion Rupees and an enterprise value of 5.16 trillion Rupees. The negotiations, revealed by an inside source, were conducted between personal parties, by Ambani’s close aide Manoj Modi and Brian Sheth, co-founder of Vista .

Jio previously cut a deal of 5.7 billion dollars with Facebook for a 9.99 percent stake in Jio Platforms and secured an investment of 750 million dollars from private equity firm Silver Lake.

The three aforementioned deals in tandem with envisioning to sell 7 billion dollars in new shares will help bring Reliance closer to its set target of 21.4 billion dollars of net debt by year end. It will also further solidify Jio Platforms’ positioning as a consumer-tech company.

Already viewed as a telecom giant that has assisted hundreds of millions of Indians use internet for the very first time by offering cheap mobile data plans, Ambani is now planning to introduce a new retail venture. This venture will be combined with Jio and interests in music, education and films. This could pose a challenge to already established firms such as Amazon and Walmart’s Flipkart.

Reliance reported a 39 percent decline in March quarter profit last month. It was hit by a steep decrease in oil prices and lower fuel demand.

It is also noted that Vista Equity has over 57 billion Dollars in capital commitments. The company has also invested in organizations across various industry verticals such as healthcare, real estate and media and entertainment.

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