Facebook has announced a massive investment of USD 5.7 billion (Rs 43,574 crore) to buy a 10 per cent stake in the firm that houses billionaire Mukesh Ambani's telecom arm Jio as the social media giant looks to expand presence in its largest market in terms of subscriber base.
"Today we are announcing a USD 5.7 billion, or Rs 43,574 crore, investment in Jio Platforms Ltd, part of Reliance Industries Ltd, making Facebook its largest minority shareholder," the company said in a statement.
Reliance in a separate statement said the investment by Facebook values Jio Platforms at Rs 4.62 lakh crore pre-money enterprise value (USD 65.95 billion, assuming a conversion rate of Rs 70 to a US dollar). "Facebook's investment will translate into a 9.99 per cent equity stake in Jio Platforms on a fully diluted basis," it said.
Jio Platforms, a wholly-owned subsidiary of Reliance Industries Ltd (RIL), houses digital services of the group. Reliance Jio Infocomm Ltd, with 388 million subscribers, is a wholly-owned subsidiary of Jio Platforms.
In an video message Mukesh Ambai said. “I am here to share with you some exciting news. All of us at Reliance and Jio are delighted to welcome Facebook Inc. as our long-term and esteemed partner. At the core of our partnership is the commitment that Mark Zuckerberg and I share for the all around digital transformation of India and for serving all Indians. Together, our two companies will accelerate India’s digital economy to empower, to enable and to enrich you. Our partnership will be a great catalyst to make India the world’s leading digital society. Over the past few years, Facebook, WhatsApp and Instagram have become a part of our daily life."
The Facebook deal will certainly give an edge to Reliance over other players including Walmat and Amazon which will be striving hard to win digital kirana race in the post Covid era.