Facebook has bought a 9.99 per cent stake in Mukesh Ambani’s digital operation Reliance Jio for Rs 43,574 crore in a deal that puts the pre-money enterpise value of Jio Platforms at Rs 4.62 lakh crore.
This deal will make Facebook the largest minority shareholder in Jio Platforms Limited, giving the social media giant a firm foothold in a fast-growing massive market, and helps the Indian oil-to-telecom conglomerate to significantly cut debt.
Commenting on the partnership with Facebook, RIL chairman Mukesh Ambani 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.”
In a Facebook post, Mark Zuckerberg said one focus of the 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.”
Jio Platforms, Reliance Retail Limited 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, the two companies have announced.
“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,” said a statement issued by Reliance Jio on Wednesday.
Since Jio’s launch in 2016, Reliance has emerged as the only company capable of competing with US tech groups in the fast-growing Indian market. It has expanded from mobile telecoms into everything from home broadband to ecommerce. Reliance Jio also owns a suite of services including music streaming service JioSaavn, on-demand live television service JioTV and payments service JioPay.
The investment values Jio Platforms amongst the top 5 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.
A recent report by Cisco said India is poised to have more than 900 million internet users due to the increased penetration of affordable smartphones and cheaper internet plans. India will also have around 2.1 billion internet-connected devices by 2023, said the report.