PE Giant Silver Lake That Backed Alibaba, Airbnb, Others Takes Reliance Jio Closer To IPO

American private equity giant Silver Lake Partners’ investment in Reliance Jio comes in less than two weeks of the Facebook deal. Silver Lake has paid a 12.5 percent premium over Facebook. Its $750 million infusion in Jio Platforms takes the latter’s valuation up to $65 billion, and also inches Jio a step closer to a prospective IPO.

Putting the Silver Lake deal in perspective, Sanchit Vir Gogia, Founder and CEO, Greyhound Research (a tech research and advisory firm) says, “This will add pace to the evolution of Jio since it allows them the ability to go a fresh investment cycle. Intent here is clearly three-fold: debt reduction and overall profitability; equity dilution at tech valuations; and sentiment uptick with global names. Jio Platforms should, in theory, get listed sooner than later – and that should dramatically change valuations.”

The partnership is also being seen as a “hybrid opportunity” that will help Reliance build synergies between online and offline operations. “This is not a digital opportunity alone. This is a hybrid opportunity, where RIL will marry its prowess is both domains,” says Gogia.

“Silver Lake investment in Jio Platforms means their ability to build, launch and scale platforms like JioMeet that connect to eHealth and eEducation services that leverage traditional assets and businesses of RIL,” he adds.

It is also likely to bring in new business practices at Jio, including newer board structures, governance policies, service plans and delivery, and management changes. “Eventually, there could be a need to bring in professionals,” says Gogia.

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Analyst:

Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, a Global, Award-Winning, Technology & Innovation Research & Advisory firm. To read more about him, click here.

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