Jio Platforms garners Rs 67,195 crore in four weeks ahead of RIL rights issue

Jio Platforms, the wholly-owned subsidiary of Reliance Industries, on May 17 has added one more investor - General Atlantic - under its public shareholding header, taking total investors' count to four within less than four weeks.

Global growth equity firm General Atlantic will invest Rs 6,598.38 crore in Jio Platforms against 1.34 percent equity stake, Reliance Industries Limited said in a BSE filing.

With this, Reliance Industries and Jio Platforms, have so far garnered Rs 67,194.75 crore from private equity investors (Silver Lake, Vista Equity Partners and General Atlantic) and Facebook Inc by selling 14.81 percent stake in Jio Platforms.

Amongst them, Facebook deal was the biggest as Jio raised Rs 43,574 crore by selling 9.99 percent stake to WhatsApp owner.

The deal with General Atlantic is good and big sentiment booster for investors ahead of rights issue worth Rs 53,125 crore announced by the Reliance Industries, experts feel.

"It is definitely a sentiment booster as Jio wants to be a high-end technology company than normal telecom operator. Hence it aims to attract marquee investors and technology partners," Kedar Shahoo Kadam, DGM & Head Research at Cholamandalam told Moneycontrol.

He said Jio plans would be much bigger than currently on table.

"Hence there could be lot of things (on retail, gaming, entertainment etc) in the pipeline to transform from telecom to high-end technology company. Jio will chase entire telecom landscape with much more add on services to offer apart from call and data through digitalisation," he added.

The biggest ever rights issue by Reliance Industries, the largest company by market capitalisation, will open for shareholders on May 20 and will close on June 3.

The largest ever rights issue of Rs 53,125 crore will open for subscription on May 20 and the closing date is June 3, 2020.

Company has been fixed issue price at Rs 1,257 per share for its rights issue, the first by Reliance Industries in nearly three decades.

The rights entitlement ratio is 1 equity share for every 15 equity shares held by eligible shareholders as on the record date which was May 14.

RIL is India's largest private sector company, with a consolidated turnover of Rs 6,59,205 crore, cash profit of Rs 71,446 crore, and net profit of Rs 39,880 crore for the year ended March 2020.

Ahead of its mega rights issue, Reliance in its corporate presentation 'New Reliance for a New India' highlighted the hyper-growth of consumer businesses along with a robust oil-to-chemicals (O2C) platform, robust and high quality balance sheet to be sustained by strong cash flow generation, and improved cash flow generation increases potential for greater shareholder benefits, reflecting in the re-rating of the stock.

It is now at the beginning of a new and unprecedented wave of wealth creation for India by harnessing the power of new technologies to fire its diverse growth engines, it said.

After General Atlantic deal, Akash Ambani, Director of Reliance Jio said, "Jio is committed to make a digitally inclusive India that will provide immense opportunities to every Indian citizen especially to our highly talented youth."

Date: May 19