OdishaPlus Bureau
- Facebook to Invest ₹ 43,574 crore in Jio Platforms For A 9.99% Stake
- Largest FDI For Minority Investment In India
- Partnership To Create Opportunities For People And Businesses
Technology giant Facebook is making a huge investment in India by entering into a partnership with Reliance Industries Limited and Jio Platforms Limited. The three companies today announced the signing of binding agreements for an investment of ₹ 43,574 crore by Facebook into Jio Platforms. This investment by Facebook values Jio Platforms at ₹ 4.62 lakh crore pre-money enterprise value. Facebook’s investment will translate into a 9.99% equity stake in Jio Platforms on a fully diluted basis. This development has propelled the shares of Jio and reposed investor faith in the relatively new enterprise.
Commenting on the partnership with Facebook, Mr Mukesh Ambani, Chairman and Managing Director, Reliance Industries Ltd, said, “We welcome Facebook as our long-term partner in continuing to grow and transform the digital ecosystem of India for the benefit of all Indians.”
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. The investment values Jio Platforms amongst the top 5 listed companies in India by market capitalization, within just three and a half years of launch of commercial services. India is home to some of Facebook’s most thriving communities on WhatsApp, Facebook and Instagram. Over the years, Facebook has invested in India and Indian businesses using their multiple platforms.
This development will greatly impact the Indian digital ecosystem by combining the vast reach of Jio network with the huge market data and insight of Facebook into giving both the companies an edge in the thriving Indian digital ecosystem. AT a time when Facebook is facing huge challenges in its core segment of video and networking by various companies like TikTok, Helo, Bigo and others, this deal will greatly help both Jio and Facebook stay ahead in competition.
This Jio-Facebook deal is a win win situation for the Indian telecom giant as well as the US based technology company. Jio going in with a big player like Facebook sends out the message that they have no plans to settle down after creating a huge disruption in the telecom sector by offering low cost 4G internet as well as mobile phones to enable 4G experience in the budget and first time smartphone user segment. At a time when the world is moving away from globalization and aims to go regional, this partnership will help Facebook tap the huge resource and potential of India’s hinterlands and rural market where Jio has already established strong network connectivity.
Jio Platforms includes Jio’s digital apps, digital ecosystems and its 4G internet services having over 388 million subscribers. Jio’s other ventures include Broadband connectivity, Smart Devices, Cloud and Edge Computing, Big Data Analytics, Artificial Intelligence, Internet of Things, Augmented and Mixed Reality and Blockchain. “Our focus will be India’s 60 million micro, small and medium businesses, 120 million farmers, 30 million small merchants and millions of small and medium enterprises in the informal sector”, read a statement from Jio.
Similarly, 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, Jio Mart, aims to connect majority of small merchants and kirana shops to 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.
The transaction is subject to regulatory and other customary approvals. Morgan Stanley as financial advisor and AZB & Partners and Davis Polk & Wardwell as counsels advised on the transaction.
