Reliance Industries rose 0.72% to Rs 899.30 at 10:34 IST on BSE after the company announced strategic transaction with Saavn to form India's largest platform for music, media & artists.
The announcement was made after market hours on Friday, 23 March 2018.Meanwhile, the S&P BSE Sensex was down 40.91 points, or 0.13% to 32,555.63.
On the BSE, 57,000 shares were traded in the counter so far compared with average daily volumes of 3.66 lakh shares in the past two weeks. The stock had hit a high of Rs 904.50 and a low of Rs 892 so far during the day. The stock hit a record high of Rs 990 on 23 January 2018. The stock hit a 52-week low of Rs 617.05 on 29 March 2017.
The large-cap company has equity capital of Rs 6334.65 crore. Face value per share is Rs 10.
Reliance Industries (RIL) on 23 March 2018 executed definitive agreements for combination of Saavn, with its digital music service, JioMusic. The combined entity is valued at over US$1 billion, with JioMusic's implied valuation at US$ 670 million. The integrated business will be developed into a media platform of the future with global reach, cross-border original content, an independent artist marketplace, consolidated data and one of the largest mobile advertising mediums.
RIL will also invest upto Rupee equivalent of US$100 million, out of which Rupee equivalent of US$20 million will be invested upfront, for growth and expansion of the platform into one of the largest streaming services in the world. The company will continue to operate the over-the-top media platform available on all app stores. The three co-founders of Saavn, Rishi Malhotra, Paramdeep Singh and Vinodh Bhat, will continue in their leadership roles and will drive growth of the combined entity.
In addition, RIL is acquiring partial stake from the existing shareholders of Saavn for US$104 million, while these shareholders retain their balance stake. The shareholder base of Saavn includes Tiger Global Management, Liberty Media and Bertelsmann among others.
RIL has entered into agreements on 23 March 2018 to subscribe to 69,787 equity shares of Saavn Media (Saavn India), for cash aggregating to Rs 805.84 crore, resulting in 41.1% equity stake. Additionally, RIL has also entered into an agreement to transfer the music streaming business of RIL, viz. JioMusic, to Saavn India (by way of a slump exchange) in exchange for the issuance of 376,980 equity shares of Saavn India to RIL, thereby giving RIL an effective equity stake of 81.7% in Saavn India.
Saavn is engaged in business of digital streaming of music through its mobile apps and website through Saavn India and Saavn LLC. Saavn LLC will become a wholly owned subsidiary of Saavn India, and an indirect subsidiary of RIL, pursuant to the transaction.
Saavn India, a company incorporated in India on 26 August 2011, had revenues of Rs 42.4 crore, Rs 29.7 crore and Rs 16.9 crore in the financial years 2016-17, 2015-16 and 2014-15 respectively. Saavn LLC is a limited liability company formed in the State of Delaware, United States and had revenues of US$ 5.72 million and US$ 3.44 million in the calendar years 2016 and 2015 respectively.
The transaction would accelerate RIL's journey towards having a bouquet of unparalleled media and entertainment services in its portfolio and provide unmatched experience to the users of its digital services business. The transactions are expected to be completed before 30 June 2018.
On a consolidated basis, RIL's net profit rose 25.53% to Rs 9445 crore on 25.69% growth in net sales to Rs 99810 crore in Q3 December 2017 over Q3 December 2016.
RIL is India's largest private sector company. The company's activities span hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, retail and 4G digital services.
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