The largest private conglomerate Reliance Industries Ltd (RIL) will not be diluting its shareholding in its subsidiary Jio Platforms to below 64.44 per cent in the near future. This is the understanding reached between the billionaire Mukesh Ambani's firm and the strategic as well as financial investors, say investment banking sources.
Jio Platform, a next generation asset light company, currently has an equity valuation in the range of Rs 4.36 lakh crore to Rs 4.91 lakh crore valued by strategic and financial investors. There is a likelihood of the new company coming out with an IPO in future, which will further unlock the value of the company and provide an exit route to investors.
Sources say the IPO is expected in the next four to eight years, but it could happen earlier if there is an agreement among all the stakeholders.
Currently, the Jio Platforms has seen RIL diluting its stake to 32.97 per cent to over a dozen strategic as well as financial investors. Two big strategic investors Facebook and Google have taken equity stake of 9.99 per cent and 7.73 per cent, respectively.
RIL currently holds around 67 per cent in the new tech company. In fact, the Ambani family as promoters hold 50.29 per cent in the flagship RIL, which has a market capitalisation of Rs 11.66 lakh crore.
A promoters' skin in the game by way of a higher shareholding shows the commitment to the business. This, in turn, brings more confidence to outside investors to remain invested in the company for a longer period to generate good returns.
With Google's investments, the total investments from financial and strategic investors into Jio Platforms has reached Rs 152,056 crore with a 32.97 per cent stake.
The other big investors include Facebook , Silver Lake, Vista, General Atlantic, KKR, Mubadala, TPG, Abu Dhabi Investment Authority, Intel Capital and Qualcomm etc.
Currently, Jio Platform has already made substantial investments in digital ecosystem, broadband connectivity, cloud computing, big data analytics etc. The subsidiary of Jio Platform Reliance Jio Infocomm also has good cashflows. It has built a future proof network with latest 4G LTE technology. This network can be easily upgraded to support even more data as technologies advance on to 5G, 6G and beyond.