Facebook buys 9.99 percent stake in Reliance Jio
New York/IBNS: In what is seen as the largest Foreign Direct Investment ( FDI) in the Indian tech sector, social media giant Facebook will buy 9.99 percent stake in Reliance Industries led Jio Platforms.
Reliance Industries Limited, Jio Platforms Limited and Facebook, Inc. on Wednesday announced the signing of binding agreements for an investment of Rs. 43,574 crore by Facebook into Jio Platforms.
This investment by Facebook values Jio Platforms at Rs. 4.62 lakh crore pre-money enterprise value ($65.95 billion, assuming a conversion rate of Rs. 70 to a US Dollar).
Facebook’s investment will translate into a 9.99 percent equity stake in Jio Platforms on a fully diluted basis.
Jio Platforms, a wholly-owned subsidiary of Reliance Industries Limited, is a next-generation technology company building a Digital Society for India by bringing together Jio’s leading digital apps, digital ecosystems and India’s #1 high speed connectivity platform under one umbrella.
Reliance Jio Infocomm Limited, which provides connectivity platform to over 388 million subscribers, will continue to be a wholly-owned subsidiary of Jio Platforms, read a statement issued by Reliance Jio.
This is the largest investment for a minority stake by a technology company anywhere in the world and the largest FDI in the technology sector in India.
WhatsApp and Digital Payment services:
Concurrent with the investment, Jio Platforms, Reliance Retail Limited and WhatsApp have also entered into a commercial partnership agreement to further accelerate Reliance Retail’s New Commerce business on the JioMart platform using WhatsApp and to support small businesses on WhatsApp.
Reliance Retail’s New Commerce platform, JioMart, is being built in partnership with millions of small merchants and kirana shops to empower them to better serve the needs of Indian consumers.
The companies will work closely to ensure that consumers are able to access the nearest kiranas who can provide products and services to their homes by transacting seamlessly with JioMart using WhatsApp.
We welcome Facebook as long-term partner: Mukesh Ambani
Commenting on the partnership with Facebook, Mukesh Ambani, Chairman and Managing Director, Reliance Industries Ltd, said, “When Reliance launched Jio in 2016, we were driven by the dream of INDIA’S DIGITAL SARVODAYA – India’s Inclusive Digital Rise to improve the quality of life of every single Indian and to propel India as the world’s leading Digital Society."
"All of us at Reliance are therefore humbled by the opportunity to welcome Facebook as our long-term partner in continuing to grow and transform the digital ecosystem of India for the benefit of all Indians," he said.
"The synergy between Jio and Facebook will help realise Prime Minister Shri Narendra Modi’s ‘Digital India’ Mission with its two ambitious goals — ‘Ease of Living’ and ‘Ease of Doing Business’ – for every single category of Indian people without exception. In the post-Corona era, I am confident of India’s economic recovery and resurgence in the shortest period of time. The partnership will surely make an important contribution to this transformation," the Indian businessman said.
Mark Zuckerberg comments:
"There's a lot going on in the world right now, but I wanted to share an update on our work in India. Facebook is teaming up with Jio Platforms -- we're making a financial investment, and more than that, we're committing to work together on some major projects that will open up commerce opportunities for people across India," Mark wrote on Facebook.
"India is home to the largest communities on Facebook and WhatsApp, and a lot of talented entrepreneurs. The country is in the middle of a major digital transformation and organizations like Jio have played a big part in getting hundreds of millions of Indian people and small businesses online," he said.
"This is especially important right now, because small businesses are the core of every economy and they need our support. India has more than 60 million small businesses and millions of people rely on them for jobs. With communities around the world in lockdown, many of these entrepreneurs need digital tools they can rely on to find and communicate with customers and grow their businesses. This is something we can help with -- and that's why we're partnering with Jio to help people and businesses in India create new opportunities," the IT icon said.
"I want to thank Mukesh Ambani and the entire Jio team for their partnership. We're looking forward to getting started," he said.
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