After Facebook, US-based private equity firm Silver Lake will pay £565.6 million to acquire 1.15% in the digital and telecom unit of Reliance Industries (RIL). Silver Lake’s biggest investment in India will help RIL accelerate its debt-reduction plans. The transaction values Jio Platforms at £51.5 billion - a 12% premium in rupee terms to the enterprise valuation implied by Facebook’s investment in the Indian company. On April 22, Facebook said it will spend £4.35 billion for a 9.9% stake in Jio Platforms, which owns India’s largest wireless operator. Both the deals, coming amid the pandemic-induced lockdown, are subject to regulatory approvals.
In 2013, Silver Lake made its first investment in India through Bengaluru-based Eka Software Solutions. The fund’s investment in Jio Platforms establishes a new pricing benchmark for the Indian company that will see more external investors in the coming months. In its quarterly earnings commentary on April 30, RIL said that it has received interest from multiple global investors to buy additional stakes in Jio Platforms and that it would announce investments similar to the Facebook transaction.
In that context, though the Silver Lake investment is positive, the size is very small compared to the Facebook deal and hence investors would like to see more marquee transactions in Jio Platforms, wrote analysts at JP Morgan in their research report.
