Facebook-Jio Deal: Facebook Buys 9.99 Percent Stake in Reliance Jio for $5.7 Billion

Social media major Facebook has invested Rs 43,574 crore into Jio Platforms, a unit of Reliance Industries for a 9.99% stake. The investment will value Jio Platforms - a digital apps platform - at Rs 4.62 lakh crore. Check out more details here.

by Monika

Updated: Apr 22, 2020 09:58 IST

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Facebook-Jio Deal.

Facebook has bought a 9.99% stake in Reliance Jio for $5.7 billion (Rs 43,574 crore), the telecom unit of Reliance Industries Ltd (RIL) in a multibillion-dollar deal that gives the social media giant a firm foothold in a fast-growing massive market and helps the Indian oil-to-telecom conglomerate to cut debt significantly. 

Facebook's investment will make it the largest minority shareholder in Jio Platforms Ltd, Jio said in a statement on Wednesday, putting the enterprise value of the business at around $66 billion. Jio Platforms holds a host of Reliance's digital assets, including Jio Infocomm.

Jio said, "The partnership between Facebook and Jio is unprecedented in many ways. 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 the launch of commercial services, validating Reliance Industries' capability in incubating and building disruptive next-generation businesses, while delivering market-defining shareholder value."

A Facebook spokesman said that WhatsApp is trying to secure approval to roll out its digital payment service in India, which will see it compete in a crowded market with Google Pay and Paytm. The authorization to expand beyond the beta launch hasn't come through yet

The messaging service has 400 million Indian users, its biggest market, reaching nearly 80% of smartphone users in the country. The deal will also aid the social media giant leverage WhatsApp to partner with Reliance's e-commerce marketplace, JioMart, that connects small businesses to customers.

"This investment underscores our commitment to India, and our excitement for the dramatic transformation that Jio has spurred in the country. In less than four years, Jio has brought more than 388 million people online, fueling the creation of innovative new enterprises and connecting people in new ways. We are committed to connecting more people in India together with Jio." Facebook founder CEO Mark Zuckerberg said in a post.

For Reliance, whose debt bomb swelled to more than $40 billion as of September, the partnership will bring in much-needed funds to make use on its promise to cut net debt to zero by March 2021.

 

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