Days after Facebook announced an almost $6 billion investment into Jio Platforms came the announcement that private equity firm Silver Lake would buy a stake in the Reliance Industries subsidiary at an even higher price.

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The deal reinforces RIL’s ability to monetise its assets while also deleveraging on its way to becoming a zero net debt company in 2020.

The recent investments also give an impetus to RIL's big-bang Rs 53,000 crore rights issue, coming as it does on pricing that's above street estimates, amid a multi-year year slump in the company's energy business and in a tough fund-raising environment.

The slew of fund raising movements RIL has undertaken ease pressure on it to conclude the Aramco deal, which the company has said is on track.

The Saudi oil major was slated to pick up 20 percent in RIL's oil to chemicals business for $15 billion (or Rs 1.12 lakh crore). Market analyst SP Tulsian warned that if the deal is on track, its valuation may go down to Rs 85,000 crore.

Between Facebook, Silver Lake, the recent Rs 7,000 crore investment from BP and the rights issue, RIL will raise over Rs 1 lakh crore, points out Edelweiss' Senior VP Jal Irani.

"This is part of a bigger game plan -- RIL's decision to restructure its balance sheet," he said, even as it puts the company on track to bring down its net debt to zero.

That plan is to strengthen its balance sheet to prepare for any eventuality, said Raj Balakrishnan, India head of the investment banking team of Bank of America, Raj Balakrishnan. “The best companies look to strengthen their balance sheet for any eventuality so they have the ability to tap into any opportunity that will emerge at the end of this volatility.”

Reliance has also signed up more deals to deleverage. It struck a deal with Canadian fund Brookfield for its telecom tower business which is “on track and likely to be completed this quarter”, the company shared in its earnings concall.

But the hallmark of Reliance's business plan has been its shift from being oil-to-chemicals company to a fully-diversified conglomerate having digital and retail as its core arms.

“This Facebook deal is an endorsement for Reliance Jio” says R Chandrasekaran, former secretary of Dept of Telecommunications.

The deal also improves the potential of value unlocking at a good price when Jio goes the IPO route.

First Published:May 4, 2020 8:32 PM IST