Facebook's Rs 43,500-cr investment in Jio likely to be big boost to telco's maiden offering plans

Facebook’s investment of Rs 43,574 crore to pick 9.9 percent stake in Reliance Industries telecom arm Jio is termed as a major booster to the latter’s initial public offering (IPO) plans, said a news report.

Jefferies says #FacebookRelJiodeal implies a pre-money equity valuation of Rs 4.63 lakh cr for Jio Platforms

Alert: Reliance Platforms is a 100% subsidiary of Reliance Ind & a parent of Reliance Jio Infocomm pic.twitter.com/F8Lsk62ljb

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The mega deal is expected to strengthen Jio’s maiden offer plans, probably later this year, especially after the global tech major invested in the telco, said a report in Moneycontrol quoting a capital markets expert. Mark Zuckerberg-led Facebook’s investment in Jio took the country’s largest telecom company to the top-five league in market capitalisation, the report said. [caption id=“attachment_8288711” align=“alignleft” width=“380”] Representational image. News18.[/caption] “With Facebook picking up a minority stake, the Reliance management has fulfilled their own condition of inducting a global investor in Jio. This paves the way for an IPO in the next 12 months, preferably in FY21 with a stake dilution of about 10 percent,” the report said quoting market veteran SP Tulsian. Another section of capital market experts are of the view that the listing may happen in two years later. In June last year, there were reports that Reliance Industries (RIL) was exploring an IPO for Jio unit in the latter half of 2020, said a report in The Economic Times. Facebook will get a seat on board on Jio Platforms Ltd, the company it is investing in, along with an observer seat, reported PTI. Once the investment comes in, Rs 15,000 crore will be retained in Jio Platforms Ltd while the rest will be used to redeem OCPS (optionally convertible preference shares) of RIL. Talking about the Facebook-Jio deal, RIL chairman Mukesh Ambani said the two companies will together accelerate India’s digital economy to empower, enable and enrich people. “The combined power of Jio’s world-class digital connectivity platform and Facebook’s intimate relationship with the Indian people will offer innovative new solutions to each one of you,” he said. He said that in the very near future, Jio Mart, Jio’s new commerce platform and WhatsApp will empower nearly 3 crore small Indian kirana shops to digitally transact with every customer in their neighbourhood. –With inputs from agencies   (Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Firstpost)