Facebook takes 9.99% stake in Reliance Jio for $5.7bn

Facebook Jio combo logo

MUMBAI: Social media behemoth Facebook Wednesday announced a $5.7 billion (Rs 435.74 billion) investment in Jio Platforms Limited, part of Reliance Industries Limited, making Facebook its largest minority shareholder.

This investment by Facebook in what is the US major's largest market values Jio Platforms at Rs 4.62 trillion 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.

Concurrent with the investment, touted as the largest foreign direct investment for minority stake in India, Jio Platforms, 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. 

The development boosted the share value of India's oil-to-retail conglomerate. Reliance Industries Ltd., helped by the mega deal, saw its share price jump 10% to touch the upper circuit at Rs 1,359 per share on Wednesday.

An official statement from Facebook reads: "This investment underscores our commitment to India, and our excitement for the dramatic transformation that Jio has spurred in the country. In less than four years, Jio has brought more than 388 million people online, fueling the creation of innovative new enterprises and connecting people in new ways. We are committed to connecting more people in India together with Jio."

The statement further reads: "One focus of our collaboration with Jio will be creating new ways for people and businesses to operate more effectively in the growing digital economy. For instance, by bringing together JioMart, Jio’s small business initiative, with the power of WhatsApp, we can enable people to connect with businesses, shop and ultimately purchase products in a seamless mobile experience."

Reliance Jio has been the fastest-growing telecom network in the country since its launch in 2016.

Jio has more than 388 million customers in India.

The transaction is subject to regulatory and other customary approvals.