Updated: April 22, 2020 11:24:29 am
Social media giant Facebook has picked up a 9.99 per cent stake in Reliance Industries’ Jio Platforms at Rs 43,574 crore ($5.7 billion) making it the largest FDI for minority investment in India. Jio Platforms is a wholly-owned subsidiary of Reliance Industries Limited that works on digital apps, digital ecosystems and the mobile service.
The investment by Facebook put the value of Jio Platforms at Rs 4.62 lakh crore pre-money enterprise value — that is $65.95 billion at a conversion rate of Rs 70 to a Dollar. The first collaboration will happen around the Jio Mart.
In a post, Facebook founder Mark Zuckerberg said with the investment the two companies were “committing to work together on some major projects that will open up commerce opportunities for people across India.” He added: “With communities around the world in lockdown, many of these entrepreneurs need digital tools they can rely on to find and communicate with customers and grow their businesses. This is something we can help with — and that’s why we’re partnering with Jio to help people and businesses in India create new opportunities.”
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In a statement, Facebook’s Chief Revenue Officer David Fischer and VP and Managing Director, India Ajit Mohan said: “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, fuelling the creation of innovative new enterprises and connecting people in new ways. We are committed to connecting more people in India together with Jio.”
Commenting on the partnership, RIL chairman and MD Mukesh Ambani said everyone at Reliance is “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”. He said the synergy will help realise 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”. Ambani said he was confident of India’s economic recovery and resurgence in the shortest period of time in the post-Corona era. “The partnership will surely make an important contribution to this transformation.”
By adding 388 billion people to the Internet, Jio has been the company that has come closest to fulfilling Facebook’s dream of taking the next billion online. The social media giant has tried everything from zero-cost internet access to free WiFi in rural areas to get more people to go online and thus offer a larger base for its products.
“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 Facebook statement said.
Suggesting that the synergy would help WhatsApp become the super-app that is has always wanted to be, the statement added: “One focus of our collaboration with Jio will be creating new ways for people and businesses to operate more effectively in the growing digital economy. For instance, by bringing together JioMart, Jio’s small business initiative, with the power of WhatsApp, we can enable people to connect with businesses, shop and ultimately purchase products in a seamless mobile experience.” WhatsApp is awaiting regulatory approval to enable digital payments for all its 400 million-odd users in India.
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