Mark Zuckerberg’s Facebook has announced the signing of binding agreements for an investment of ₹ 43,574 crore into Mukesh Ambani’s Reliance Jio Platforms. This investment by Facebook values Jio Platforms at ₹ 4.62 lakh crore pre-money enterprise value ($65.95 billion, assuming a conversion rate of ₹ 70 to a US Dollar). This the largest FDI in the technology sector in India.
Facebook’s investment will translate into a 9.99% equity stake in Jio Platforms on a fully diluted basis. Jio Platforms, a wholly-owned subsidiary of Reliance Industries Limited, comprises of Reliance Jio and other digital apps. Reliance Jio Infocomm Limited provides connectivity platform to over 388 million subscribers.
“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. 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,” said a press statement.
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.
“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. This partnership will accelerate India’s all-round development, fulfilling the needs of Indian people and the Indian economy,” Reliance said in a statement.
“ 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,”it added.
Concurrent with the investment, 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 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.
Commenting on the partnership with Facebook, Mukesh Ambani, Chairman and Managing Director, Reliance Industries Ltd, said, “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.”
The transaction is subject to regulatory and other customary approvals. Morgan Stanley as financial advisor and AZB & Partners and Davis Polk & Wardwell as counsels advised on the transaction.