This investment values Jio Platforms at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore
Reliance Industries (RIL) share price rose in early trade on May 18 after the company sold more stake in its digital arm Jio Platforms.
The company on May 17 announced that private equity firm General Atlantic Partners will invest Rs 6,598.38 crore in Jio Platforms.
This investment values Jio Platforms at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore, company said in the release.
This is a fourth major deal in a little less than four weeks from leading global technology investors including Facebook, Silver Lake, Vista Equity Partners, that will infuse a total Rs 67,194.75 crore in the digital unit of the company.
Amongst them, the Facebook deal was the biggest as Jio raised Rs 43,574 crore by selling 9.99 percent stake to the WhatsApp owner.
In another development, the rights issue committee of the company in its meeting held on May 17 proposed the schedule for payment of the balance amount of Rs 942.75 per rights equity share.
The company will pay Rs 314.25 (25 percent) in May 2021 and Rs 628.50 (balance 50%) in November 2021.
CLSA has maintained buy call on the stock with a target at Rs 1,770 per share.
According to CLSA, General Atlantic’s implied equity valuation is in-line with recent deals. However, the stake sales & rights issue give visibility on Rs 1.3 lakh crore in cash inflow.
The target to cut net debt by Rs 1.5 lakh crore is looking more realistic, while more stake sales, progress in InvIT and Aramco deals are the other triggers, it added.
At 09:18 hrs, Reliance Industries was quoting at Rs 1,477.10, up Rs 18.20, or 1.25 percent on the BSE.
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