Why Facebook Invests 43,574 Crore In Reliance Jio!

Why Facebook Invests 43,574 Crore In Reliance Jio!

In what can be the largest foreign direct investment (FDI) for minority investment in Indian company, Facebook Inc has invested a  whopping Rs 43,574 Crore in Reliance Jio for 9.99 percent stake.  Reliance Industries Limited, Jio Platforms Limited and Facebook Inc have announced the signing of binding agreements.

"This 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 ₹ 70 to a US Dollar). Facebook's investment will translate into a 9.99% equity stake in Jio Platforms on a fully diluted basis," said Jio Platforms in a statement.

Facebook Inc, which owns highly popular cross-platform messaging service WhatsApp, is aiming to offer digital payment services along with the chat service and thus tied up with Jio Platforms. If WhatsApp rolls out its digital payment service in India, it is going to directly take on with the likes of Google Pay, PhonePe, Paytm, PayU.

The diversification is paying off handsomely for Reliance Industries at the right time. The decline of Oil and Petroleum products has boosted Reliance's diversified business which is into customer business. The deal with Facebook is expected to help the Indian conglomerate cut debt that has piled up in its expensive push to secure top spot for its Jio Infocomm telecom business.

Besides getting relief through debt reduction with this deal with Facebook, Jio Platforms also gets access to Facebook's technological expertise in developing products such as JioMart, that connects small businesses to customers, and thus reach through platforms such as WhatsApp. On the whole, it's going to be a win-win deal between Jio and Facebook.