Facebook to invest Rs 43,574 crore in RIL’s Jio Platforms

The investment by Mark Zuckerberg company will help Reliance Industries Limited reduce its debt burden and leverage WhatsApp to improve the reach of JioMart

Reliance Industries Limited (RIL) has announced that it has signed a binding agreement to sell a 9.99% equity share in Jio Platforms Ltd to Facebook. The US-based social media company will invest Rs 43,574 crore (USD 5.7 billion) making it the largest minority shareholder in Jio Platforms, the company stated. The Facebook investment values Jio Platforms at Rs 4.6 lakh crore (USD 65.95 billion).

“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,” RIL said.

It further highlighted that the investment values Jio Platforms amongst the top-five 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.

Sharing details, RIL Chairman and Managing Director Mukesh Ambani said: “All of us are humbled by the opportunity to welcome Facebook as our long-term partner in continuing to grow and transform the digital ecosystem of India for the benefit of all Indians. The synergy between Jio and Facebook will help realize Prime Minister 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.”

Of the total investments, the Jio Platform will retain Rs 15,000 crore. It will use the remaining amount to redeem the optionally convertible preference share that RIL holds in the digital business. Jio Platforms is a wholly-owned subsidiary of RIL and focuses on bringing together Jio’s digital apps, digital ecosystems and high-speed connectivity platform under one umbrella. Reliance Jio Infocomm Limited will continue to be a wholly-owned subsidiary of Jio Platforms.

Commenting on the investment Facebook said, “It underscores the company’s commitment to India, and 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.”

“Our goal is to enable new opportunities for businesses of all sizes, but especially for the more than 60 million small businesses across India. They account for the majority of jobs in the country and form the heart and soul of rural and urban communities alike. In the face of the Coronavirus, it is important that we both combat this global pandemic now, and lay the groundwork to help people and businesses in the years to come,” the company stated.

Facebook further said that the investment will help it bringing together JioMart, Jio’s small business initiative, with the power of WhatsApp, to connect people with businesses, shop and purchase products in a seamless mobile experience. This is reflected in the commercial partnership agreement signed by Jio Platforms, Reliance Retail Limited, and WhatsApp.

According to RIL, the agreement aims to accelerate Reliance Retail’s new commerce platform JioMart platform and to support small businesses using WhatsApp. “JioMart is being built in partnership with millions 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 kirana who can provide products and services to their homes by transacting seamlessly with JioMart using WhatsApp,” RIL stated.

Shubhendu Parth

shubhendup@cybermedia.co.in