Mark Zuckerberg led Facebook Inc. has agreed to buy 9.99% stake in Mukesh Ambani led Jio Platforms Limited (JPL) for ₹43,574 crore, valuing the company at ₹4.62 lakh crore pre-money enterprise value ($65.95 billion, assuming a conversion rate of ₹70 to a U.S. Dollar).
Jio Platforms, a wholly-owned subsidiary of Reliance Industries Limited, is a next-generation technology company building a digital society for India by bringing together Jio’s leading digital apps, digital ecosystems and India’s first high speed connectivity platform under one umbrella.
Reliance Jio Infocomm Limited, which provides connectivity platform to over 388 million subscribers, will continue to be a wholly-owned subsidiary of Jio Platforms.
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 foreign direct investment (FDI) in the technology sector in India.
The investment values Jio Platforms amongst the top five listed companies in India by market capitalization, within just three and a half years of launch of commercial services, validating Reliance Industries’ capability in incubating and building disruptive next-generation businesses, while delivering market defining shareholder value.
“Our goal with this investment is to enable new opportunities for businesses of all sizes, but especially for small businesses across India and create new and exciting digital ecosystems that will empower, enrich and uplift the lives of all 1.3 billion Indians,” said RIL in a statement.
“This partnership will accelerate India’s all-round development, fulfilling the needs of Indian people and the Indian economy. 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, in addition to empowering people seeking various digital services.
“The partnership assumes special significance for India in the wake of the severe disruptions caused by the coronavirus pandemic in the Indian and the global economy.
“In the post-COVID era, comprehensive digitalisation will be an absolute necessity for revitalisation of the Indian economy. It is our common belief and commitment that no Indian should be deprived of the tremendous new opportunities, including opportunities for new employment and new businesses, in the process of India’s 360-degree digital transformation.”
‘India’s digital Sarvodaya’
Commenting on the partnership with Facebook, Mr. Mukesh Ambani, Chairman and Managing Director, Reliance Industries Ltd, said, “When Reliance launched Jio in 2016, we were driven by the dream of INDIA’S DIGITAL SARVODAYA – India’s Inclusive Digital Rise to improve the quality of life of every single Indian and to propel India as the world’s leading Digital Society. All of us at Reliance are therefore 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 realise Prime Minister Shri 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. 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,” he added.
Commercial partnership agreement
Concurrent with the investment, Jio Platforms, Reliance Retail Limited (“Reliance Retail”) 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.
WhatsApp already plays an important role in helping people and businesses connect in India. Reliance Retail’s New Commerce platform, JioMart, is being built in partnership with millions of small merchants and kirana shops to empower them to better 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.
Jio’s vision is to enable a Digital India for 1.3 billion Indians and Indian businesses, especially small merchants, micro-businesses and farmers. Jio has built a world-class digital platform powered by leading technologies such as Broadband connectivity, Smart Devices, Cloud and Edge Computing, Big Data Analytics, Artificial Intelligence, Internet of Things, Augmented and Mixed Reality and Blockchain. Jio has created an ecosystem comprising network, devices, applications, content, service experiences and affordable tariffs for every Indian to experience the Jio Digital Life.
As one of the largest countries in the world, India is home to some of Facebook’s most thriving communities on WhatsApp, Facebook and Instagram. Over the years, Facebook has invested in India based on a strong belief in India’s entrepreneurial talent and opportunity, to help create meaningful impact for Indians and Indian businesses using their multiple platforms.
RIL shares on BSE were trading up 6.87% at Rs 1319.9 on Wednesday morning.
News Source: The Hindu