IBEF: April 23, 2020
Reliance Industries Limited, Jio Platforms Limited and Facebook, Inc. entered in binding agreements for an investment of Rs 43,574 crore (US$ 623 billion) by Facebook into Jio Platforms.
This investment by Facebook values Jio Platforms at Rs 4.62 lakh crore (US$ 66.10 billion) pre-money enterprise value. This investment will translate into a 9.99 per cent equity stake in Jio Platforms on a fully diluted basis.
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.
A world-class digital platform powered by leading technologies such as Broadband connectivity, Smart Devices, Cloud and Edge Computing, Big Data Analytics, Artificial Intelligence, Internet of Things, Augmented and Mixed Reality and Blockchain has been developed by Jio.
The company has designed an eco-system consisting of network, devices, applications, content, service experiences and affordable tariffs for every Indian to experience the Jio Digital Life. Jio’s platforms have been a dependable and inclusive Digital Lifeline for our Nation during Covid-19 pandemic.
The partnership between Facebook and Jio is unique in many ways and 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.
The statement by the company 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 investment will be focused in providing new opportunities for businesses of all sizes, but especially for small businesses across India and built new and exciting digital ecosystems that will empower, enrich and uplift the lives of all 1.3 billion Indians.
“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," said Mr Mukesh Ambani, Chairman and Managing Director, Reliance Industries Ltd.
"The synergy between Jio and Facebook will help realise Prime Minister Mr 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," added RIL CMD.
The financial advisor on agreement was Morgan Stanley and AZB & Partners and Davis Polk & Wardwell acted as counsels advised RIL on the transaction.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.