Private Equity (PE) investors generally retain a 10% to 25% investment in the share capital of a business and the major investment is mainly held by the promoters. There has existed a surge in promoters amassing a minority interest in the group, with the capital framework of the enterprise being distributed to several investors. Where the PE investors need to attain a controlling share, promoters maintain between 10% to 25%. It is also familiar for PE investors to maintain a significant minority investment in the business.
American social media and technology colossus, Facebook aims at investing ₹43,574cr for a 9.99% investment in Jio Platforms, an associate of Reliance Industries Ltd (RIL). The contract furnishes a pre-enterprise price of ₹4.62trn, with a conversion rate of ₹70 to the mobile communications business. Accordingly, formal safety like council seats, the ability to veto, quorum liberties, information rights, and exit rights have a crucial role in certifying the investor’s rights are safeguarded. Considering the Facebook deal, it is a tremendous undertaking for a minor stake by a technology corporation in the world and is the largest FDI funding in the Indian tech sector. Facebook serves as a major minority shareholder of Jio after the contract is authorized and will rank Jio Platforms in the prime 5 listed Indian companies by market capitalization.