After bagging multi-billion dollar deals from marquee investors in the last one month, billionaire Mukesh Ambani’s Reliance Industries Ltd (RIL) will now be considering an overseas listing of Jio Platforms, said two people, requesting anonymity.
Jio Platforms houses RIL’s digital business assets, including Reliance Jio Infocomm Ltd, which in turn holds the Jio connectivity business—mobile, broadband and enterprise, besides others such as Jio Apps, tech backbone. It has also invested in other tech entities such as Haptic, Reverie, Fynd, NowFloats, Hathaway and Den Networks.
Over the past one month, Jio Platforms has raised $10.3 billion across five deals—a 9.99% stake to Facebook for $5.7 billion; 1.2% to Silverlake for $750 million; 2.3% to Vista Equity Partners for $1.5 billion, 1.34% to General Atlantic for $870 million, and a 2.32% stake in KKR for $1.5 billion.
The enterprise value of Jio Platforms has reached ₹5.15 trillion within six months of its launch, making it comparable with global platforms, such as Alphabet, Tencent, and Alibaba, which are largely debt-free and have large digital ecosystems.
“RIL may look for a simultaneous listing of Jio Platforms. However, this would happen only after the market sentiments, domestic and global, improve. An overseas listing will give the private equity investors a better exit,” said a banker.
Last August, Ambani had said that he was aiming to list RIL’s consumer businesses, Reliance Jio, and Reliance Retail in the next five years.
“We have received strong interest from strategic and financial investors in our consumer businesses. We will induct leading global partners in these businesses in next few quarters, and move towards listing both these companies in next five years,” he had told shareholders at the company’s AGM.
“Through these deals, RIL has affirmed Jio’s position as a global platform. This would help the company’s IPO plans, which have been in place for some years now,” said an analyst of a domestic broking firm.
RIL had launched Reliance Jio, now India’s largest telecom operator, in September 2016.
The plans for an overseas listing come just a few days after the Centre said that it will bring in necessary changes to allow Indian companies to directly list on overseas stock exchanges in order to increase capital availability for homegrown companies. However, the rules, including tax-related and foreign exchange management act changes, are yet to be notified.
Meanwhile, RIL is also tapping the domestic capital markets to raise ₹53,000 crore through its first rights issue in three decades. As part of the proposed rights issue, shareholders of RIL will be offered one new share for every 15 held at ₹1,257 apiece. Shareholders who subscribe to the rights issue will have to pay ₹314.25 per share at the time of application and the rest, ₹942.75, in one or more tranches.
The rights issue and the stake sales in Jio are part of RIL’s plans to become a zero net-debt company by the end of March 2021. The company’s net debt was at ₹1.53 trillion as on 31 December. An email sent to RIL did not elicit any response.
Jayshree P. Upadhyay contributed to the story
The article was first published on livemint.com