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Facebook Buys 9.99% Stake In Mukesh Ambani's Reliance Jio, Largest FDI In India's Tech Sector
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India, 22 April 2020 6:59 AM GMT | Updated 22 April 2020 8:42 AM GMT
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This multibillion-dollar deal will make Facebook the largest minority shareholder in Jio Platforms Limited.
Social media giant Facebook will invest ₹43,574 crore into Jio Platforms, a unit of Reliance Industries, for a 9.99 per cent stake, in a deal that puts the pre-money enterprise value of Jio Platforms at ₹4.62 lakh crore.a
This multibillion-dollar deal will make Facebook the largest minority shareholder in Jio Platforms Limited.
India's oil-retail-telecoms conglomerate Reliance Industries Limited (RIL) led Jio Platforms called it the largest investment for a minority stake by a technology company anywhere in the world and the largest FDI in the Indian tech sector in a statement on April 22.
While this partnership will help RIL reduce its debt, which bulged due to the breakneck expansion of Jio and other businesses, it will assist Facebook in getting a firm footing in a fast-growing and massive market. Ambani had earlier invested around $40 billion to launch Jio in 2016.
According to an Economic Times report, Mark Zuckerberg's Facebook has stated that the focus will be on collaborating its messaging platform WhatsApp with Reliance's e-commerce venture JioMart to enable people to connect with small businesses.
"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. The partnership will surely make an important contribution to this transformation," said RIL chairman Mukesh Ambani.
Thanking Mukesh Ambani In a Facebook post, Mark Zuckerberg said one focus of the collaboration with Jio will be creating new ways for people and businesses to operate more effectively in the growing digital economy.
"For instance, by bringing together JioMart, Jio's small business initiative, with the power of WhatsApp, we can enable people to connect with businesses, shop and ultimately purchase products in a seamless mobile experience," Zuckerberg wrote.
The two companies have announced that 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.
"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 can access the nearest kiranas who can provide products and services to their homes by transacting seamlessly with JioMart using WhatsApp," reads the statement issued by Reliance Jio on April 22.
Jio Platforms is now amongst the top five listed companies in India by market capitalisation due to the investment, within just three and a half years of the launch of commercial services, confirming Reliance Industries' capability in nurturing and building disruptive next-generation businesses, while delivering market-defining shareholder value.
"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," Zuckerberg added.
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