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Mukesh Ambani has sold a stake in its Indian digital services group Reliance Jio for the third time in three weeks, agreeing on a $ 1.5 billion deal with US buying group Vista Equity Partners, people with direct knowledge of the matter said.
The sale is the latest move by India’s wealthiest man, which is controlled by Reliance Industries, to ease the conglomerate’s heavy debt burden. Late last month, Ambani agreed to sell a 10 percent stake to Facebook for $ 5.7 billion and earlier this week a $ 750 million deal with Silver Lake Partners that valued Jio at $ 65 billion.
That’s the same valuation Vista will acquire a 2.3 percent stake in Jio Platforms, a Reliance subsidiary, said a person familiar with the terms of the FT agreement.
The series of deals underscores Jio’s growing appeal to foreign investors seeking to find a foothold in India’s fast-growing Internet market as it seeks to consolidate its dominant position in telecommunications and expand to a broader range. of services.
For Vista, a software-focused purchasing company, the acquisition is intended to open the Jio ecosystem to its range of portfolio companies that would seek to expand the reach of their products and services in India.
The negotiations were built on personal connections between Robert Smith, the founder of Vista, and Mr. Ambani, one person said. The discussions were led by Brian Sheth, co-founder of Vista, who is half-Indian from the same Gujurati fund as Ambani, and Monti Saroya, a senior executive from Vista who is also Indian-American, with Manoj Modi of Reliance.
Morgan Stanley, who also worked on the Facebook and Silver Lake offerings, advised Reliance.
Reliance, whose main businesses continue to be oil refining and petrochemicals, launched Jio as a telecommunications operator in 2016. Since then, the company has attracted 388 million users to its 4G network by offering mobile contracts at reduced prices, helping to drive a boom in data consumption.
Since then, Jio has expanded into domestic broadband, streaming, and e-commerce, with the goal of creating an Indian internet group whose position would rival that of Alibaba in China. Reliance has also created India’s biggest brick and mortar retail concern as part of its broader shift to consumer-oriented businesses.
Partnering with Facebook in particular will give Jio tremendous reach, linking his e-commerce platform to Facebook’s WhatsApp messaging service, which has around 400 million users in India. This will help you compete against headlines like Amazon and Flipkart, owned by Walmart.
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Reliance has courted international investors to help reduce the sizeable debt burden it has taken on through its rapid expansion in telecommunications and digital services. Ambani has promised to reduce his net debt, which was more than $ 20 billion in March, to zero within a year.
The tycoon separately announced a $ 7 billion rights issue, the largest in India, last week as part of a fundraising campaign. However, an agreement is still pending for Saudi Aramco to take a 20 percent stake in Reliance’s oil-to-chemicals business. Falling crude oil prices have strained the Saudi group’s earnings, as well as Reliance’s lucrative energy deals.
The company has said it is in talks with investors to sell more of its new digital and retail businesses, in order to eventually list them.
