Qualcomm picks up a 0.15% stake in Reliance Jio for ₹730 crore

• Mukesh Ambani's Reliance Industries on Sunday said it has secured ₹730 crore from wireless technology leader Qualcomm
• With this deal, Reliance has sold 25.24% stake in Jio Platforms Ltd - the unit that houses India's youngest but largest telecom firm Jio Infocomm and apps.
• In total, Jio has raised ₹1,18,318.45 crore.

Billionaire Mukesh Ambani's Reliance Industries on Sunday said it has secured Rs 730 crore from wireless technology leader Qualcomm by selling a small stake in its technology venture, adding to a slew of investments since April that has crossed Rs 1.18 lakh crore.

"Qualcomm Ventures' investment will translate into 0.15 per cent equity stake in Jio Platforms on a fully diluted basis," the company said in a statement.

The investment, the company said, will deepen the ties with Qualcomm that will help Jio rollout of advanced 5G infrastructure and services in India.

With this deal, Reliance has sold 25.24 per cent stake in Jio Platforms Ltd - the unit that houses India's youngest but largest telecom firm Jio Infocomm and apps. In total, Jio has raised Rs 1,18,318.45 crore.

Qualcomm, which is the 12th marquee firm to have set a sight on India's hottest digital play in as many weeks, values Jio Platforms at Rs 4.91 lakh crore, the statement said.

Proceeds from the stake sales in Jio Platforms along with the Rs 53,124 crore raised in a rights issue in June and from sale of a 49 per cent stake in its fuel retail network to BP last summer for Rs 7,000 crore, will help the company become net debt-free, Reliance announced last month, once the promised funds come in (75 per cent of the funds from the rights issue will come in next year).

As of March, Reliance had a net-debt of over Rs 1.6 lakh crore.

Qualcomm is the world's leading wireless technology innovator and the driving force behind the development, launch and expansion of 5G.

Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said, "Qualcomm has been a valued partner for several years and we have a shared vision of connecting everything by building a robust and secure wireless and digital network and extending the benefits of digital connectivity to everyone in India".

"As a world leader in wireless technologies, Qualcomm offers deep technology knowhow and insights that will help us deliver on our 5G vision and the digital transformation of India for both people and enterprises," he said.

Steve Mollenkopf, CEO of Qualcomm Incorporated, said, "With unmatched speeds and emerging use cases, 5G is expected to transform every industry in the coming years".

"Jio Platforms has led the digital revolution in India through its extensive digital and technological capabilities. As an enabler and investor with a longstanding presence in India, we look forward to playing a role in Jio's vision to further revolutionise India's digital economy," he said.

The transaction is subject to customary conditions precedent.

Morgan Stanley acted as financial advisor to Reliance Industries and AZB & Partners and Davis Polk & Wardwell acted as legal counsels. Trilegal acted as legal counsel for Qualcomm Ventures.

The Jio Platforms deal spree began on April 22 when social networking giant Facebook agreed to acquire 9.99 per cent for Rs 43,573.62 crore.

Since then, six US private equity firms invested in Jio: Silver Lake Partners bought 2.08 per cent for Rs 10,202.55 crore, Vista Equity Partners paid Rs 11,367 crore for a 2.32 per cent stake, General Atlantic acquired a 1.34 per cent stake for Rs 6,598.38 crore, KKR paid Rs 11,367 crore for a 2.32 per cent stake, TPG bought a 0.93 per cent stake for Rs 4,546.80 crore and L Catterton picked up 0.39 per cent for Rs 1,894.50 crore.

Earlier this month, the investment arm of computer chip giant Intel Corp picked up 0.39 per cent stake for Rs 1,894.50 crore.

Jio Platforms has also received a funds from the Middle East which started with Mubadala Investment Co which picked up a 1.85 per cent stake for Rs 9,093.60 crore and was followed by Saudi Arabia's sovereign wealth fund, the Public Investment Fund, as well as the Abu Dhabi Investment Authority buying 2.32 per cent and 1.16 per cent stake for Rs 11,367 crore and Rs 5,683.50 crore, respectively.

Qualcomm's investment values Jio at Rs 4.91 lakh crore - the same amount as the previous several deals and a 12.5 per cent premium to the first investment by Facebook.

Of these deals, the one with Facebook, L Catterton, The Public Investment Fund (PIF), Silver Lake and General Atlantic have closed and the money has flown to Reliance.

Jio Platforms - which is also amassing a wide range of services from music streaming to online retail and payments - is expected to use its 388 million mobile phone subscribers as the cornerstone of an e-commerce and digital services business to rival Amazon and Walmart's Flipkart.

Jio has become Reliance's growth engine, combining with the company's fast-growing retail arm to help in offsetting the decline in oil and petrochemicals.

Ambani had in August last year announced talks for sale of a 20 per cent in the oil-to-chemical (O2C) business to Saudi Aramco for USD 15 billion. However, the recent plunge in oil prices has left that deal under a cloud of uncertainty, although Reliance has said it is on track. ANZ BAL BAL