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Vista Equity Partners Acquires 2.32% stake in Reliance Jio

Reliance Industries on Friday said that US based investment firm Vista Equity Partners will be acquiring 2.32 percent equity stake in its telecom arm Reliance Jio. The Texas headquartered investment firm will be shelling out INR 11, 367 crore or $1.5 Bn for a stake in India’s largest telecom company (by subscriber base).

The deal will make Vista Equity Partners third largest investor in Reliance Jio, after Reliance industries and social media giant Facebook. This is also third most high profile deal in the Mumbai headquartered telecom company in less than a month. These back-to-back deals have helped the company to fetch almost INR 60,596 in a very short span of time.

Below is a table highlighting the brief details of these three investments.

Date   Investor   Investment amount Stake 
May 8 Vista Equity partner Rs 11, 367 crore 2.32%
May 4 Silver Lake Rs 5,656 crore 1.15%
April 22 Facebook Rs 43,575 crore 9.99%

 

These deals have come at a time when Reliance Industries core business of oil refining and petrochemicals have suffered due to the COVID-19 outbreak. The global crash in oil prices is also likely to have further impact on its core business. The company reported 38% drop in its YOY net profit for quarter ended on March 31st.

Amid pressure on its core business, the company recently announced that it will soon launch a right issue of $7 Bn or INR 53, 215 crore.

Reliance Jio has a special place in India’s telecom story since it is widely credited for bringing down the data prices across the county. After its grand launch in 2016, India witnessed a mass adoption of the internet and this fact also augured well for India’s budding startup industry. Reliance Jio essentially helped in entrenching the app ecosystem in India, thereby putting several Indian internet startups in an advantageous position.

About Vista Equity Partners

Vista Equity Partners is a private equity investment firm that was founded in 2000 by American investors Robert F. Smith and Brian Sheth. Over the last two decades, the company has emerged as a leading investor in technology and software companies.

According to information on Wikipedia, in 2018 the firm had made over $43 Bn in cumulative capital commitment and owned majority stakes in nearly 50 software companies. Only last month (i.e. March 2020, Vista has acquired an online sales and event management technology called Tripleseat.

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