Jio Platforms now more valuable than rest of RIL businesses put together

At Wednesday’s price, RIL’s market capitalisation stood at Rs 8.64 trillion. This means, the other businesses are being valued by the Street at Rs 4.28 trillion

Reliance Industries’ (RIL’s) deal with Facebook to sell 9.99 per cent in Jio Platforms has two messages for the oil to telecom major’s shareholders. The key one is that Jio Platforms is now more valuable than all other businesses of RIL put together, including refining, petrochemicals and retail.

Consider this: Facebook is buying 9.99 per cent stake in Jio Platforms, a 100 per cent subsidiary of RIL, for Rs 43,574 crore. This translates into a market/equity value of Rs 4.36 trillion for Jio Platforms. RIL’s stock gained over 10 per cent after the deal was announced. At Wednesday’s price, RIL’s market capitalisation stood at Rs 8.64 trillion. This means, the other businesses are being valued by the Street at Rs 4.28 trillion.

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The other message is that the deal has kick-started the monetisation of digital assets and will help RIL reduce debt, create an incremental revenue stream and could lead to higher valuations for its consumer facing verticals, especially Reliance Retail. The news of falling leverage levels is positive as it came at a time when its core oil and gas vertical was facing major headwinds because of the collapse of crude oil prices. This had raised concerns over the completion of the deal with Aramco, wherein the world’s biggest oil producer was looking at picking up 20 per cent stake in RIL’s chemical and refining business in a deal valued at $15 billion. With the fresh investment from Facebook, leverage concerns have receded…