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With the investment of ₹11,367 crore by Saudi Arabia’s Public Investment Fund (PIF) in lieu of a 2.32 per cent stake, a major stake sale cycle in Jio Platforms Ltd (JPL), a subsidiary of Reliance Industries Ltd (RIL), has ended for now, said JP Morgan in a report.
“While RIL has not mentioned how much stake it would like to divest in JPL, in our view, the major stake sale cycle in JPL is likely done for now,” it said.
The total stake sale in JPL has hit 24.7 per cent and it is unlikely to see further sale for now, though RIL has not publicly stated what holding it would be comfortable with, it said.
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Saudi’s Public Investment Fund invests ₹11,367 crore in Jio Platforms
Saudi Arabia’s sovereign wealth fund, this is the single largest investment in India till dateWith the latest sale, RIL has sold a total of 24.7 per cent stake in JPL for a cumulative amount of ₹1.15-lakh crore.
“While RIL has not announced or given any details as to what kind of stake sale it would like to do in JPL, with about 25 per cent of JPL divested, we believe the current round of stake sale is likely done, and we would be surprised to see further large stake sales in JPL from here,” it added.
The stake sale, Jio Platforms’ 11th in the past nine weeks, values the company at an equity value of ₹4.91-lakh crore and an enterprise value of ₹5.16-lakh crore, RIL said in a statement on Thursday.
No IPO timeline
“There are no IPO timelines for now,” it said.
There is no clarity as to when an IPO would take place. Importantly, while Jio’s telecom business is well rolled out with nearly 400 million subscribers, there has been no revenue traction yet on the various commerce initiatives of the “ecosystem” monetisation. These would now be rolled out and over the years would scale up in revenue.
“Hence, any IPO price discovery any time soon (next one year) does look difficult, in our view. Therefore, the ‘public market’ RIL investor would need to continue looking at the ‘private market’ transactions in JPL to bid up the stock,” JP Morgan said in the report.
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