Largest FDI in India’s technology sector to spur nation’s 360-degree digital transformation.
The world’s largest social media company Facebook is investing $5.7 billion in India’s Reliance Jio Platforms to take a 9.99% equity stake in the country’s biggest telecom operator with more than 388 million subscribers.
Agreement for an investment of 435.74 billion rupees ($5.7 billion) by Facebook into Jio Platforms, a three and a half year old subsidiary of India’s largest private sector company, Reliance Industries was announced in Mumbai Wednesday.
This largest Foreign Direct Investment in India’s technological sector by Facebook values Jio Platforms at 4.62 trillion rupees pre-money enterprise value ($65.95 billion, assuming a conversion rate of ₹ 70 to a US Dollar), a media release said.
Facebook’s investment will translate into a 9.99% equity stake in Jio Platforms on a fully diluted basis.
“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,” said Reliance Industries Chairman and Managing Director Mukesh Ambani.
“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,” he said.
“Jio’s vision is to enable a Digital India for 1.3 billion Indians and Indian businesses, especially small merchants, micro-businesses and farmers,” the release said.
Jio has brought transformational changes in the Indian digital services space and propelled India on the path towards becoming a global technology leader and among the leading digital economies in the world, it said.
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, the release noted.
Over the years, 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, it said.
Reliance’s goal with this investment, the release said, “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, it said.
“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 is our common belief and commitment that no Indian should be deprived of the tremendous new opportunities,” the company said, “in the process of India’s 360-degree digital transformation.”
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.
WhatsApp already plays an important role in helping people and businesses connect in India.
Reliance Retail’s New Commerce platform, JioMart, is being built in partnership with millions of small merchants and kirana ( small general) shops to empower them to better serve the needs of Indian consumers, the release said.
The companies, it said, 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.