Facebook on Wednesday announced $5.7 billion (Rs 43,574 crore) to buy 10 per cent stake in Mukesh Ambani’s Jio platform, making it the largest Foreign Direct Investment (FDI) in the technology sector in India.
“Today we are announcing a USD 5.7 billion, or Rs 43,574 crore, investment in Jio Platforms Ltd, part of Reliance Industries Ltd (RIL), making Facebook its largest minority shareholder,” the social media giant said in a statement.
Reliance has valued Jio Platforms at Rs 4.62 lakh crore pre-money enterprise value (USD 65.95 billion, assuming a conversion rate of Rs 70 to a US dollar). “Facebook’s investment will translate into a 9.99 per cent equity stake in Jio Platforms on a fully diluted basis,” it said.
Jio Platforms is a wholly-owned subsidiary of Reliance Industries Ltd (RIL). It houses all digital services of the group including Reliance Jio Infocomm Ltd.
RIL has also been talking to Saudi Aramco for a 20 per cent stake in its core oil and chemical business for around $15 billion.
The deal will help Facebook deeper access into the Indian market with the nearly 400 million subscriber base of Jio. India is the 2nd largest market after China. Facebook is looking to start payment services on its popular messaging app WhatsApp. Experts believe having a local partner with a wide base will help spread its wings quicker.
Apart from the tech, the deal will Jio achieve zero debt status by March 2021.
Internet users are expected to rise to 850 million in 2022, up from 450 million in 2017, according to PwC.
RIL also revealed that Jio Platforms, Reliance Retail Ltd and WhatsApp have entered a deal to accelerate JioMart platform using WhatsApp. JioMart will provide consumer access to the nearest small merchant and kirana shops via WhatsApp.
Chairman Mukesh Ambani said the new deal will help realize the goal of ‘Digital India’ and that “in the post-corona era, I am confident of India’s economic recovery and resurgence in the shortest period of time.”
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