Asia’s richest man is on a roll, striking three massive investment deals in less than three weeks amidst the ongoing lockdown, and has been able to raise about USD 8 billion through these three mega investments for a cumulative 13.5% stake. It all started on April 22 with the Facebook-Jio deal- an investment of USD 5.7 billion wherein Facebook brought billions of dollars in the Mukesh Ambani-led RIL’s shares. And now Equity giants seem to be getting bullish about the Mukesh Ambani-led conglomerate.
Two such Private Equity firms- Vista Equity Partners and California-based Silver Lake Partners are going to invest heavily in Reliance Jio- the telecom and digital unit of the Reliance Industries Ltd.
Earlier this week, Silver Lake Partners agreed to buy just over 1 per cent stake in Reliance Jio for USD 748 million- a premium of 12.5 per cent in the value of Jio’s enterprise compared to the value indicated by Facebook that bought as many as 9.99 per cent share in the telecom and digital unit of Reliance Industries Ltd. whose main business is refining and petrochemicals (at least a few years ago) as it accounts more than two-thirds of the total revenues and almost all of the profit.
Having already sealed massive investments from Facebook and Silver Lake Partners, Reliance Jio has now attracted Private Equity giant Vista Equity Partners that has agreed to buy 2.3 per cent stake in the digital platform for USD 1.5 billion.
For a conglomerate whose main business is refining and petrochemicals, it is quite an achievement that it is managing to attract massive investments amidst the ongoing lockdown and slump in oil prices.
Jio has saved the day for Reliance Industries Ltd. and diversification has come to the rescue of Mukesh Ambani who has managed to become the richest person in Asia once again replacing Jack Ma after the Facebook-Jio deal.
The Private Equity firms are investing heavily in the digital platform for a reason- they are impressed by its future plans and strongly vindicating its prospects. With the Facebook-Jio deal, the biggest FDI ever in India’s history, Reliance and Jio are going to collaborate that is going to power massive business.
Mukesh Ambani’s Reliance Jio has India’s data market under its grip and Asia’s richest man understands the value of data. Emphasising this, he had said, “In this new world, data is the new oil. And data is the new wealth,” at the Vibrant Gujarat Summit last year.
The Facebook-Jio deal also strongly pushes the Jio Mart- Jio’s new commerce platform to connect with 3 crore Kirana (retail stores) in the country. The deal empowers Jio Mart to connect with the retail stores via Facebook’s messaging platform- Whatsapp which could be a game-changing innovation giving Jio Mart an edge over other e-commerce platforms like Amazon and Flipkart.
What the Facebook-Jio deal has also done is push the Mukesh Ambani-led conglomerate closer to its “zero debt” ambitions, as, after Facebook’s investment in the digital platform, Private Equity giants seem interested in Reliance Jio, the separate entity that Mukesh Ambani is planning to bring together all the digital operations.
Reliance Jio remains the undisputed leader of India’s telecom market while all other telecom majors seem to be embroiled in deep trouble after the Supreme Court ruling on Adjusted Gross Revenue (AGR). And India’s telecom market leader has big plans ahead including locking horns with China’s 5G tech major, Huawei having decided to roll out indigenous technology instead of depending on foreign firms.
Reliance Jio is making it big and with the Facebook-Jio deal, its future never looked as bright as it looks now. This is why Private Equity giants like Vistara and Silver Lake too have gone bullish about it. With momentous investments during the nationwide lockdown, Asia’s richest man Mukesh Ambani has thus shown why he is, what he is.
