MUMBAI - Two more firms are eyeing a share of Reliance Industries Ltd’s (RELI.NS) $65-billion digital unit Jio Platforms, according to Bloomberg News, setting them up to be a part of a growing list of firms that have recently invested in the Indian company. In same token, Reliance is in talks to acquire stake in the online pharmacy NetMeds.
U.S. private equity firm General Atlantic is considering investing about $850 million to $950 million in the Mumbai-based company, a Bloomberg report here said, citing people with knowledge of the matter.
The deal could be completed as soon as this month, though no agreement has been finalized and plans may change, it added.
Saudi Arabia’s Public Investment Fund (PIF) is also considering to buy a minority stake in Jio, Bloomberg said in a separate report.
Reliance Industries has also announced a ₹53,215 crore ($7 billion) rights issue. As part of this proposed rights issue, shareholders of Reliance will be offered one new share for every 15 held at ₹1,257 apiece. It’s the first right issue by India’s most valuable firm in three decades.
General Atlantic declined to comment on the report, while Jio and PIF did not immediately respond to Reuters request for comment.
Hours earlier on Friday, Reliance Industries announced a $1.5 billion stake sale in Jio to Vista Equity Partners, the third deal in just over two weeks.
The conglomerate cut a $5.7 billion deal with Facebook (FB.O) for a 9.99% stake in Jio on April 22 and a few days later, it secured a $750 million investment from private equity firm Silver Lake.
Together the three deals will inject a combined $8 billion in the telecoms-to-energy group and help it pare its debt.
Vista’s investment gave Jio an equity value of 4.91 trillion rupees ($65 billion) and an enterprise value of 5.16 trillion rupees, said Reliance, controlled by billionaire tycoon Mukesh Ambani.
The potential investments from New York-based General Atlantic and the Saudi sovereign wealth fund, which manages over $300 billion in assets, would inject money on top of the $8 billion which Jio has already raised.
Saudi’s PIF has been buying minority stakes several companies. Last month, it disclosed an 8.2% stake in coronavirus-hit Carnival Corp (CCL.N), sending the cruise operator’s shares up nearly 30% higher.
Reliance Industries has also announced a ₹53,215 crore ($7 billion) rights issue. As part of this proposed rights issue, shareholders of Reliance will be offered one new share for every 15 held at ₹1,257 apiece. It’s the first right issue by India’s most valuable firm in three decades.
Reliance is raising funds at a breakneck pace as it attempts to cut its debt and secure its capital needs amid a sharp downturn in the global economy. The collapse in oil prices and demand for fuels because of coronavirus-related lockdowns have led to the sharpest profit decline in nearly two decades at its main chemicals and refining division.
The aforesaid equity sales as well as the rights issue are all part of RIL’s plans to become a zero-debt company by the end of March 2021. Reliance’s net debt stood at ₹1.53 trillion as of 31 December.
Meanwhile, Bloomberg also reported on Thursday that RIL is considering selling 4.9% stake in Asian Paints Ltd valued at about $989 million as part of its efforts to trim its debt. The stake sale will be done through a series of block trades, the report added.
Also, the Mukesh Ambani-led Reliance is reportedly in advanced talks to acquire a majority stake in Chennai-based online pharmacy Netmeds.
As a part of the deal, Reliance may integrate $130-$150 million for the asset through one of its subsidiaries along with a fresh infusion of capital in Netmeds to expand the operations, said a news report quoting sources aware of the development. The talks for this acquisition had been on before the lockdown.
Reliance has been building up it’s online to offline commerce business by acquiring controlling stakes in several business-to-business and consumer-facing Internet companies.
It’s worth noting that Netmeds recently launched its grocery delivery service via RIL-owned Reliance Retail.
If the deal goes through, Netmeds would be the eighth company that Reliance has acquired since 2017. It has spent close to $3 billion on acquisitions in companies including Saavn, Embibe, Fynd, Haptik, and NowFloats among others.
A media house Entrackr had exclusively reported on Reliance acquiring a majority stake in fashion-e-commerce platform Fynd and Saas-based NowFloats.
Netmeds, the five-year-old pharmacy firm, has raised $100 million in its funding rounds till now. The most recent includes an infusion of Rs 250 crore from its parent entity Tresara Health Pvt Ltd in October 2019.
Currently, the company sells prescription drugs, personal care products, medical devices surgical and baby accessories, and groceries.
To fuel its growth, Netmeds has also made few acquisitions since its inception. It acquired JustDoc in September 2018, Delhi-based hyperlocal drugs delivery startup Pluss in November 2016, and KiViHealth in March last year.