India’s biggest telco Reliance Jio is set to receive another huge cash injection as it agreed a deal with US private equity fund, General Atlantic, to purchase a 1.3 per cent stake in the business.
General Atlantic will acquire the 1.3 per cent stake for $870 million, according to reports in the press, in a deal that values Reliance Jio at around $65 billion.
Reliance Jio has courted interest from a swathe of US investors in recent weeks, with social media giant Facebook invested a reported $5.7 billion for a 9.99 per cent stake in the company. Equity funds Vista Equity Partners and Silver Lake invested $1.5 billion and $750 million respectively, bringing total investments from US firms to almost $9 billion in the past month.
Reliance Jio was launched in 2016 and since then has revolutionised India’s telecoms market, bringing its own range of ultra cheap 4G data tariffs and affordable hansets to over 300 million subscribers. The company has played a massive role in kick starting the country’s digitalisation push.
The money from the US investors will be used to pay down the debt of Jio’s parent company Reliance Industries, whose primary business focus is in the oil and gas sector. The money will also be used to fast track the expansion and densification of Reliance Jio’s 4G networks, particularly as the country opts to work from home during the current Covid 19 pandemic.
Relaince Jio has won numerous industry awards for providing the fastest mobile download speeds in the country.