Facebook buys 9.99% stake in Reliance Jio for Rs 43,574 crore, Largest FDI in India's Tech Sector

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United States social media major Facebook will invest Rs 43,574 crore into Jio Platforms, a unit of Reliance Industries, for a 9.99% stake, a development which said on Wednesday it has increased India's shares sales by more than 8% in trade.

The investment will value Jio Platforms - a platform for digital applications - at Rs 4.62 lakh crore. An agreement with RIL-led Mukesh Ambani to reduce debt and allow a company led by Mark Zuckerberg to reach the forefront of America's largest market.

Both companies, in separate statements, say they will collaborate on some major projects that will open up business opportunities to people across India.

"Reliance Industries Limited, Jio Platforms Limited and Facebook, Inc. today announced the signing of binding agreements for an investment of Rs43,574 crore by Facebook into Jio Platforms," RIL said in a statement on Wednesday. 

This Facebook investment values ​​the Jio Platforms at Rs4.62 lakh crore value pre-money for the business ($ 65.95 million, assuming a conversion rate of Rs70 into the US dollar). Facebook's investment will convert us to a 9.99% equity stake in Jio Platforms on a wholly-owned basis, "said an oil telecom business house.

Relance Jio - RIL's Telecom division with 388 million subscribers - will continue to remain the owners of the Reliance Platform. RIL said this is the largest investment for a minority stake made by a technology company anywhere in the world and the largest FDI in the technology sector in India.

In early trading on Wednesday, RIL stock had risen 6.8% to Rs1,320.55 on the BSE.

"At the core of our partnership is the commitment of Mark Zuckerberg, the founder of Facebook, and I involved in the digital transformation of India and working for all Indians… After Corona, I hope to recover India's economy and launch it in the shortest possible time. Collaboration will play a major role in the transition, "said Mkesh Ambani, chairman and MD of RIL in a statement.

In a separate statement, Facebook said the agreement emphasized their commitment to India. India is the largest Facebook market with 328 million monthly users The company's WhatsApp messaging app has 400 million users in the country, and the world's largest.

“This is very important right now, because small businesses are the cornerstone of the whole economy and need our support. India has over 60 million small businesses and millions of people rely on them to find jobs, ”Zuckerberg said in a Facebook post.

"With communities around the world in lockdown, many of these businesses and entrepreneurs need digital tools they can rely on to find and connect with customers and grow their businesses," he said. "We look forward to getting started".

The main focus of the deal is to come up with digital-based solutions for 60 million micro, macro, small, medium and medium enterprises, 120 million farmers, 30 million small traders and merchants and millions of small and medium enterprises in the informal sector.

Concurrent with investments, Jio Platforms, Reliance Retail and WhatsApp have also entered into a joint venture agreement to further accelerate Reliance Retail's New Commerce business on the JioMart platform using WhatsApp and support small businesses on WhatsApp.

"In the near future, JioMart - Jio's new digital trading platform, as well as WhatsApp - will empower almost 3 crore small Indian Kirana


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