MUMBAI (Maharashtra): Reliance Industries Limited (“Reliance Industries”), Jio Platforms Limited (“Jio Platforms”) and Facebook, Inc. (“Facebook”) today announced the signing of binding agreements for an investment of ₹43,574 crores by Facebook into 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 Rs 70 to a US Dollar).
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, 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 #1 high-speed connectivity platform under one umbrella.
David Fischer, Chief Revenue Officer at Facebook, and Ajit Mohan, VP and Managing Director of Facebook India, said one example of such collaboration could be bringing together JioMart, Jio’s small business initiative, with WhatsApp, which counts India as its biggest market with more than 400 million users.
“We can enable people to connect with businesses, shop and ultimately purchase products in a seamless mobile experience,” they said.
Reliance Jio Infocomm Limited, which provides connectivity platform to over 388 million subscribers, will continue to be a wholly-owned subsidiary of Jio Platforms. Jio has created an eco-system 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 a 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.
The investment values Jio Platforms amongst the top 5 listed companies in India by market capitalization, within just three and a half years of the launch of commercial services, validating Reliance Industries’ capability in incubating and building disruptive next-generation businesses, while delivering market-defining shareholder value.
Reliance said that this partnership focus on 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 the revitalisation of the Indian economy.
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.
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 Kirana stores 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:
“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.
The synergy between Jio and Facebook will help realise Prime Minister 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.