Intel Capital, the global investment unit of the chipmaker, will invest $253.3 million (Rs 1,894.5 crore at current exchange rates) in Reliance Industries (RIL) telecom subsidiary Jio Platforms.
The transaction will be done at an equity value of $65 billion (Rs 4,91,000 crore) and an enterprise value of $68 billion (Rs 5,16,000 crore), the statement added. Post investment, Intel Capital will acquire a 0.39% equity stake in Jio Platforms on a fully diluted basis.
“We are extremely delighted to deepen our ties with technology leaders that embody our vision of transforming India into a leading digital society in the world. Intel is a true industry leader, working towards creating world-changing technology and innovations. Intel Capital has an outstanding record of being a valuable partner for leading technology companies globally,” Mukesh Ambani, chairman and managing director of Reliance Industries, said.
Intel Capital is the second technology corporation, after Facebook, and the eleventh firm to have joined Jio’s fundraising spree.
On April 22, social media major Facebook infused $5.7 billion in the company in exchange for a 9.9% equity. This was followed by fund infusions from global private equity players such as Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala Investment Company, Abu Dhabi Investment Authority, Saudi Arabia’s Public Investment Fund (PIF), TPG and L Catterton.
Including the current fundraise, the telecom subsidiary has raised a total of $15.74 billion so far, selling a 25.09% stake.
Jio Platforms owns proprietary telecom technology 4G LTE and apps such as JioSaavan, JioTV and JioPay. Reliance Jio Infocomm, which has a subscriber base of 388 million, is run through Jio Platforms.
After disrupting the telecom industry by offering competitively priced high-speed internet access in 2016, Reliance Jio forayed into the broadband and home entertainment space with JioFiber. The company has also taken on Amazon and Flipkart by venturing into India’s booming ecommerce market with a soft launch of JioMart late last year.
The fundraising spree is part of Reliance’s efforts to reduce debt. Ambani had made a commitment to shareholders in August to slash the group's net debt to zero by early 2021. Last month, he announced that the company has become free of net debt, thanks to Jio’s stake sales and a rights issue.
“Jio Platforms focuses on applying its engineering capabilities to bring the power of low-cost digital services to India. (This) aligns with Intel’s purpose of delivering breakthrough technology. We believe digital access and data can transform business and society for the better. Through this investment, we are excited to help fuel digital transformation in India, where Intel maintains an important presence,” Wendell Brooks, president of Intel Capital, said.
Intel has had a presence in the country for more than two decades and currently employs thousands of people at its facilities in Bengaluru and Hyderabad.
Intel Capital invests globally in startups that focus on artificial intelligence, autonomous vehicles, data centres and cloud, 5G, and next-generation compute. Since 1991, Intel Capital has invested $12.9 billion in more than 1,582 companies worldwide.
It recently exited from software services provider Happiest Minds Technologies, selling its entire stake, a VCCircle report said. Earlier, the investment firm has also exited telecom equipment firm Tejas Networks, B2B online marketplace IndiaMart InterMesh, e-gifting venture 123Greetings and commodities bourse operator Multi Commodity Exchange of India.
Globally, 692 of its portfolio companies have gone public or participated in a merger, the statement said.