US social media giant Facebook will be investing Rs 43,574 crore into Jio Platforms, a subsidiary of Reliance Industries for a 9.99 percent stake, a development which ignited the shares of India’s oil-to-retail conglomerate over 8 percent in early trade, on Wednesday. This is India’s largest FDI in tech sector.
The investment will be adding Rs 4.62 lakh crore to Jio Platforms, a digital apps platform -. The deal with help Mukesh Ambani-owned RIL reduce debt further and allow the Mark Zuckerberg-led company get a stronger foothold in what is the US major’s largest market.
“Reliance Industries Limited (“Reliance Industries”), Jio Platforms Limited (“Jio Platforms”) and Facebook, Inc. (“Facebook”) today announced the inking of binding agreements for an investment of Rs 43,574 crore by Facebook into Jio Platforms,” said Mukesh Ambani-led RIL in a statement on Wednesday.
“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% equity stake in Jio Platforms on a fully diluted basis,” added the oil-to-telecom business house.
Reliance Jio, RIL’s telecom unit with 388 million subscribers will continue to be a wholly owned subsidiary of Reliance Platform.
RIL stated that this development was the largest investment for a minority stake by a technology company anywhere in the world and the largest FDI in the technology domain in India.
“At the core of our partnership is the commitment that Mark Zuckerberg, founder of Facebook, and I share for the all-round digital transformation of India and for serving all Indians…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,” said Mukesh Ambani, chairman and MD of RIL in the statement.
In a separate communication, Facebook stated that the deal underlines its commitment to India. India is the biggest market for Facebook with 328 million monthly users and the company’s WhatsApp messaging app has nearly 400 million users in the country, also the maximum in the world.
“…Our efforts with Jio will be focused on opening new doors and fueling India’s economic growth and the prosperity of its people. We look forward to working with Jio, and to future collaborations in India to advance this vision,” Facebook said in its statement.
“…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 added.