Facebook has bought a 9.9% stake in Reliance Jio for $5.7 billion (Rs 43,574 crore), the telecom unit of Reliance Industries Ltd (RIL). The investment values the Jio Platforms at Rs 4.62 lakh crore ($65.95 billion) pre-money enterprise value.
The deal will help the Indian conglomerate cut debt that has piled up in its expensive push to secure top spot for its Jio Infocomm telecom business.
Facebook’s investment will make it the largest minority shareholder in Jio Platforms Ltd, Jio said in a statement on Wednesday, putting the enterprise value of the business at around $66 billion. Jio Platforms holds a host of Reliance’s digital assets including Jio Infocomm.
Also read: Corona Virus Symptom Checker Launched by JIO
Facebook said, “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.”
Since its launch three years ago, Jio, led by billionaire Mukesh Ambani, has grown at a sprinter’s pace to become India’s largest telecom company. It has accumulated some 340 million customers through a barrage of innovations, including offering cut-throat mobile internet prices and a diverse suite of products and including chat services, movies, games, and music.
For Reliance, whose debt pile swelled to more than $40 billion as of September, the partnership will bring in much-needed funds to make good on its promise to cut net debt to zero by March 2021.
Along with this deal, Reliance Retail and WhatsApp have also entered into a commercial partnership agreement. This will boost Reliance Retail’s New Commerce business on the JioMart platform using WhatsApp. JioMart will use WhatsApp to communicate and support small businesses on WhatsApp.