Riyadh: Reliance Jio’s fast-paced profits aren’t missing the eye of potential investors. Saudi Arabia’s Public Investment Fund (PIF) which holds over $320 billion in assets is exploring its options to buy a minority stake in the Indian Telecommunication company. Saudis PIF is one of the largest sovereign wealth funds in the world.
While the world is facing crisis due to the ongoing COVID-19 pandemic, Jio has managed to earn an astounding $8 billion after its deal with Facebook, Silber Lake, and Vista. Facebook has bought almost 10% stake in Jio’s digital unit for $5.7 billion while Silver Lake and Vista Equity Partners have said that they will be investing almost $2.25 billion in total.
RIL had announced the deal to sell a 2.23% stake in Jio to Vista for $1.5 billion. The total equity sale went up to 13.45% and getting a flow of $7.95 billion.
Saudi Aramco, the company which had sparked interest in investing in Reliance’s petroleum and petrochemical business, is due to report its earnings next week. Comments regarding the continued due diligence are also expected in the report. Reliance Industries Limited or RIL had previously stated that due diligence is being carried out regarding the deal proposed by Aramco for a 20% stake hold in its petroleum sector. The multinational Indian company in its statement last week had reassured investors of the crude oil crash rumors due to the pandemic has raised doubts over the negotiations.
Jio is rapidly expanding its business and investors and while three investors have come in there are prospects of “similar-sized deals” in Jio.
Another company, General Atlantic has already been doing the rounds as they are conversing with RIL to invest $850 million to $950 million in the company owned by Asia’s richest man. If things go accordingly, there is news of the deal getting signed by the end of the month, as stated by the insiders who chose not to be named as the information is private.
With the General Atlantic and PIF deal coming into place, Jio will be its 5th deal in a row.
PIF was a holding company for government investments in domestic businesses. Its authorization was expanded after the Crown Prince gave his nod in 2015 for international stakes in a way to support the economic state of the country and diversify the same. The sovereign wealth fund is looking into “any opportunity” arising from the economic wreckage of the crisis, said the fund’s governor, Yasir Al-Rumayyan at a virtual event last month. The fund expects to see “lots of opportunities,” he said, citing airlines, energy and entertainment companies as examples.
PIF, on its website, says it wants to become the world’s largest sovereign fund by a mix of domestic and international investments. In 2015, the mandate of the PIF was overhauled with Crown Prince Mohammed bin Salman as the Chairman and the PIF to report to the Council of Economic and Development Affairs (CEDA).
