Facebook Buys 9.9% Stake in Reliance Jio for Rs 43,574 Crore

The largest Social media platforms in the world, Facebook, has picked up a 9.99% stake in Mukesh Ambani's Jio platform. Mark Zuckerberg's Facebook is spending Rs. 43,574 crore ($5.7 billion) to buy this stake. The valuation of the Jio platform now stands at over $65.95 billion (around 4.62 Lac Crore). It is not only the largest Foreign Direct Investment (FDI) in the technology sector but also the largest FDI for a minority investment in India.


"There's a lot going on in the world right now, but I wanted to share an update on our work in India. Facebook is teaming up with Jio Platforms -- we're making a financial investment, and more than that, we're committing to work together on some major projects that will open up commerce opportunities for people across India," Said Mark Zuckerberg.

Source: Facebook post of Mark Zuckerberg

He further added that India is home to the largest communities on Facebook and WhatsApp, and a lot of talented entrepreneurs. The country is in the middle of a major digital transformation, and organizations like Jio have played a big part in getting hundreds of millions of Indian people and small businesses online.

Key Takeaways from This Investment

Reliance Jio is a wholesome subsidiary of Mukesh Ambani's Reliance Industries Ltd. The Jio network has substantially grown within just four years of its launch. Today, Jio has more than 388 million customers in India.


Under the Jio Platforms, the online groceries delivery platform JioMart will get the maximum benefit out of this investment.


For Reliance Jio

The deal with Facebook will give impetus to RIL's goal to cut net debt to zero by March 2021. Also, Facebook's popular platform WhatsApp, will help JioMart to bring local vendors, independent hawkers, and small Kirana stores online. 
The JioMart works on the model to connect consumers with the local vendors and small Kirana businesses. After the deal, the local Grocery stores or vendors can register on JioMart, the online grocery delivery platform. They would receive orders from the consumers through WhatsApp. This will be a big step in helping the already struggling local vendors to survive.

All of us at Reliance are 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- said Mukesh Ambani

For Facebook:

After this deal, Facebook becomes the largest minority shareholder in Reliance Jio. Further, Facebook will get access to Reliance Jio's 388 million customers.
India has always been a valuable market for Facebook. It tops the list of users for Facebook. Its WhatsApp chat service, which is about to launch a payments service, has attracted 340 million users.

Conclusion

This deal is expected to play a crucial role in the post COVID-19 Indian economy. The partnership of these two giants is believed to garner opportunities for 60 million small businesses across India. Further, it will be a crucial step to grow the digital economy of the country.