Facebook has signed an agreement with Reliance Industries Limited (RIL) for an investment of Rs 435.74 billion into Jio Platforms. This investment by Facebook 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 per cent equity stake in Jio Platforms on a fully diluted basis.
This is the largest investment for a minority stake by a technology company anywhere in the world and the largest foreign direct investment (FDI) in the technology sector in India. The investment values Jio Platforms amongst the top 5 listed companies in India by market capitalisation, within just three and a half years of launch of commercial services, validating RIL’s capability in incubating and building disruptive next-generation businesses, while delivering market defining shareholder value.
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. The companies 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.
Commenting on the partnership with Facebook, Mukesh Ambani, chairman and managing director, RIL, 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. 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. 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.”
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.