Fifth investment in the Bucket of RIL to become Debt-free

Recent investments by Facebook, General Atlantic, Vista and Silver Lake will re-position Jio as a major tech player rather than a telecom service provider
Reliance Jio

Reliance Industries(RIL) is the talk of the town ever since it announced that it is going to Debt-free till March’21. Since every investor, corporates and financial advisories are closely watching the new moves made by the conglomerate to achieve its target for doing so.

At the beginning of the 2020 when COVID-19 knocked the door and the deal with Saudi Aramco came to a halt the Debt-free was a question in the mind of both the promoters and the general public. But the investment by Facebook and the announcement of the Rights Issue by the conglomerate change the scenario all together. Now it has been assumed that RIL would surely achieve the target before the deadline, some might predict till the end of the calendar year 2020.

Besides the investment by the Facebook there are other firms who invested in the Jio platforms:

  • On May 5th the US private equity firm Silver Lake invested Rs. 5600 crores in Jio platform for the stake of 1.15%
  • Subsequently, on May 8th Vista Equity partners added Rs. 11400 crores in the capital of Jio for 2.32% stake.
  • Then, private equity firm General Atlantic closed the deal of 1.34% stake at Rs. 6600 crore.

Now, the private equity giant KKR becomes the fifth investment for the Jio platform.

The Mukesh Amabni’s company is slowly making a roadmap to achieve its target for becoming Debt- free. The Debt in the books of RIL stood at Rs. 1.61 lakh crore. With the five investment and rights issue it has already acquired Rs.78500 crores in which the rights issue share stands at Rs. 53125 crore.

The haunted deal with the Saudi Aramco in which Ambani plans to sell the 20% of the stake in the oil-chemical business. There are huge chances for the deal to happen despite the problems going in the oil markets which would be the milestone for the achievement of the target of Debt-free.

KKR is the private equity giant which had a past record of investment in technology driven companies.  This includes BMC Software, ByteDance and GoJek through its private equity and technology growth funds. It’s been investing in India since 2006. This investment is by far the biggest investment of the private equity giant in Asia. Although this is the fifth investment in the Jio platform, it by share size the second largest investment in five investments standing with Vista Equity for 2.32% stake for Rs. 11400 crores. Although this investment is subject to regulatory approval in India but looking at the past record it has a chance of confirmation.

There are more investments and decisions that would come into the picture for the RIL debt free journey. These are hard times for the economy. Foreign investment can be a good scope for the improvement of the economic scenario of the country. Only time will tell how the markets and the economy reacts on the different such scenarios.

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