Facebook picks up 10% stake in Jio Platform for Rs 43,574 crore
New Delhi: Facebook on Wednesday announced an investment of USD 5.7 billion (Rs 43,574 crore) to buy a 10 per cent stake in the firm that houses billionaire Mukesh Ambani's telecom arm Jio as the social media giant looks to expand presence in its largest market in terms of subscriber base.
"Today we are announcing a USD 5.7 billion, or Rs 43,574 crore, investment in Jio Platforms Ltd, part of Reliance Industries Ltd, making Facebook its largest minority shareholder," the company said in a statement.
Reliance in a separate statement said the investment by Facebook values Jio Platforms at Rs 4.62 lakh crore pre-money enterprise value (USD 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," it said.
Jio Platforms, a wholly-owned subsidiary of Reliance Industries Ltd (RIL), houses digital services of the group. Reliance Jio Infocomm Ltd, with 388 million subscribers, is a wholly-owned subsidiary of Jio Platforms.
The Facebook deal is part of value unlocking by RIL to cut debt. RIL has been seeking strategic partnerships across its businesses while targeting to deleverage its balance sheet.
It has been talking to Saudi Aramco for sale of a 20 per cent stake in its oil-to-chemical business for an asking of USD 15 billion. RIL has already tied up with BP Plc for fuel business as it targets to have a debt-free status by next year.
Jio had also been reportedly talking separately to Google but the fate of those discussions is not known.
The latest deal is a win-win for both Facebook and Jio. It would give Facebook deeper access to India, the second largest internet market after China.
Facebook already has 400-plus million Whatsapp users in India and is looking to launch a payment offering. Having a local partner could help it in navigating various regulatory issues, including those related to privacy and local storage.
Also, having a good telecom partner could help Facebook improve its reach to masses.
From an RIL perspective, it could leverage on Facebook's technology expertise and talent pool as well as help in its ambitions to make Jio a digital company. This apart, the deal would aid the company achieving zero debt status by March 2021.
Since launching Jio in 2016, RIL has emerged as the only Indian company capable of competing with US tech groups in the fast-growing Indian market, expanding from mobile telecom into everything from home broadband to e-commerce.
Jio has emerged as the number one telecom operator in India, both in terms of traffic as well as revenue in a virtual two-player market since the third player, Vodafone-Idea is struggling under regulatory burden. Jio's main competitor is Bharti Airtel.
Facebook said the 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," it added.
Together with WhatsApp and Instagram, Facebook overall is estimated to have more users in India than any other single country.
The number of internet users in India is projected to rise to about 850 million in 2022, according to consultancy PwC, up from 450 million in 2017.
"The partnership between Facebook and Jio is unprecedented in many ways. This is the largest investment for a minority stake by a technology company anywhere in the world and the largest FDI in the technology sector in India," RIL said.
"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," the statement said.
RIL said that concurrent with the investment, Jio Platforms, Reliance Retail Ltd and WhatsApp have also entered into a commercial partnership agreement. This is to further accelerate Reliance Retail's new commerce business on the JioMart platform using WhatsApp and to support small businesses on WhatsApp.
JioMart provides consumer access to the nearest small merchant and kirana shops.
Commenting on the partnership with Facebook, RIL Chairman and Managin Director Mukesh Ambani 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".
The synergy between Jio and Facebook will help realise the goal of 'Digital India', he said. "In the post-corona era, I am confident of India's economic recovery and resurgence in the shortest period of time," he added.
The transaction, RIL said, is subject to regulatory and other customary approvals.
Morgan Stanley as a financial advisor and AZB & Partners and Davis Polk & Wardwell as counsels advised RIL on the transaction.
Let the Truth be known. If you read VB and like VB, please be a VB Supporter and Help us deliver the Truth to one and all.
Family of injured driver in murder of Suvendu's aide seeks exemplary punishment
Kolkata (PTI): The family of Buddhabeb Bera, the driver injured in the shooting that killed BJP leader Suvendu Adhikari's close aide Chandranath Rath, demanded exemplary punishment for those responsible and urged the new government to ensure such incidents do not happen in West Bengal.
Rath was shot dead in Madhyamgram near Kolkata on Wednesday night, triggering a political storm in the state. Bera, who was driving the vehicle at the time of the attack, sustained gunshot wounds and is currently undergoing treatment at a private hospital.
Family members said they learned about the incident through television and immediately left for Kolkata.
ALSO READ: Trump says EU has until July 4 to approve last year's trade deal or it will face higher tariffs
"We came to know from TV reports that my nephew had been shot. We still do not know who carried out the attack or why it happened," Buddhabeb's uncle Biswajit Bera said.
"Our only wish now is that he recovers and returns home safely," he added.
Buddhabeb, 25, hails from Majnaberia village in the Chandipur police station area in Purba Medinipur district.
According to family members, he mostly stays in Kolkata for work and visits home occasionally during weekends.
Besides his parents, his younger brother, sister-in-law and several relatives have also travelled to Kolkata following the incident.
Demanding strict action against the perpetrators, the uncle said, "We want the government to conduct a proper investigation and identify those directly involved in the crime. They should be given exemplary punishment so that such incidents do not happen again in West Bengal and no other family has to go through this grief."
A neighbour, Ranjana Ghorai, also sought stringent punishment for those behind the attack.
"In our neighbourhood, we call him Sona. We want exemplary punishment for the people responsible for this incident," she said.
Rath's family members have demanded life imprisonment for the accused, while Adhikari has called for capital punishment for those involved in the killing.
