US private equity firm Silver Lake is set to invest 56.56 billion Indian rupees (about $747 million) in Indian operator Jio Platforms. The investment follows an earlier one by Facebook of $5.7 billion for 9.99% of the company.

Silver Lake will receive a 1.15% stake in the firm, giving it a valuation of $65 billion or 12.5% more than the valuation implied by the Facebook investment. Both the Facebook and Silver Lake investment will be used to reduce Jio Platform’s debt, which it is committed to reducing from $21 billion to zero by 2021. This has been made more challenging because its core business includes oil and petrochemicals which have been hit hard in recent months, with net profit falling by 37% in the last quarter. However, its mobile arm – Reliance Jio – is doing well, having nearly tripled its profits in FY2019, and adding  81 million mobile users in the year ending March 2020.

Jio Platforms operates broadband and online commerce services, including Reliance Jio, India’s largest mobile operator which has 388 million subscribers. Jio Platforms also runs music streaming service JioSaavn (which has plans to become a public company), on-demand TV service JioTV, and payments service JioPay. It has only been minimally impacted by the Indian telecoms AGR crisis, owing a modest $26 million which it has paid in full.

Mukesh Ambani, chairman and MD of Reliance Industries, said that several firms had expressed interest in buying stakes in Jio Platforms in the wake of the deal with Facebook. India is an interesting market for Facebook, whose WhatsApp service is the most popular smartphone app in India with over 400 million active users. It has said it will work with Jio Platform on its e-commerce offerings, which has already seen JioMart test an ordering system over WhatsApp.

Silver Lake has approximately $40 billion under investment and focuses on the technology market. It has made several investments already this year – including in Expedia, Airbnb and Twitter. Mukesh Ambani said: “We’re excited to leverage insights from their global technology relationships [Silver Lake’s] for the Indian digital society’s transformation.”

Posted by Teresa Cottam

Teresa is the Chief Analyst at Omnisperience and has over 25 years' experience in the telecoms and technology markets. She is an expert on SME and enterprise telecoms, and has considerable vertical market expertise. Her research focus lies in helping B2B telecoms firms become more commercially successful by better understanding and meeting their customers' needs. She is a judge of the GSMA Global Mobile Awards (GloMo's) for customer experience and enterprise innovation, and for the UK Cloud awards. You can follow her on Twitter @teresacottam

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