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Private equity firm Silver Lake has agreed to invest $750m in India’s Reliance Jio, following Facebook’s steps which less than two weeks ago took a $5.7bn stake in Mukesh Ambani’s Indian digital services company.
Jio, backed by Ambani’s oil-to-retail conglomerate Reliance Industries, has attracted 388 million 4G telecom subscribers since it was launched in 2016 by India’s richest man.
It has since diversified into a range of services from e-commerce to broadband and streaming.
Facebook announced last month that it would pay $5.7bn (€5.13, £4.52) for 10 per cent of Jio, its second-largest investment after buying messaging platform WhatsApp in 2014.
Silver Lake’s backing for Jio values the telecoms company at $65bn, a premium of 12.5 per cent to the valuation implied by the Facebook deal.
In April, Silver Lake invested in Expedia and Airbnb and in March, the buyout group invested $1bn in Twitter.
For Reliance, the investment is an endorsement of Mr Ambani’s ambition to create a homegrown Indian tech company to rival Silicon Valley’s heavyweights. “Silver Lake has an outstanding record of being a valuable partner for leading technology companies globally,” Ambani said.
Jio helped to accelerate internet adoption in India by offering users cut-price 4G contracts and has sought to build out a suite of online services.
The investment is also another step in Reliance’s efforts to cut its net debt, which surged to more than $20bn as part of the costs of building Jio. Ambani has vowed to reduce net debt to zero by March 2021.
At the same time, last week Reliance announced a rights issue worth $7bn, making it India’s largest ever, as part of its fundraising drive.
