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(Eds: Adding details) New Delhi, Jun 24 () The Competition Commission on Wednesday said it has cleared Facebook's proposed acquisition of 9.99 per cent stake in Jio Platforms, the digital arm of Reliance Industries. The USD 5.7 billion (Rs 43,574 crore) deal -- the single largest FDI in the technology sector in India -- was announced in April. The US social-networking major had set up a separate entity -- Jaadhu Holdings LLC -- for making the investment. The Competition Commission of India (CCI) has approved "acquisition of 9.99 per cent stake in Jio Platforms by Jaadhu Holdings LLC", according to a tweet. Jio Platforms was created in October last year to house all-digital initiative of Reliance. The deal would bring together JioMart, the e-commerce venture of Asia's richest man Mukesh Ambani, and Facebook's WhatsApp platform to connect consumers with neighbourhood kirana stores. WhatsApp has over 400 million users in India while Jio has more than 388 million phone subscribers. Facebook has about 250 million users in India. Deals beyond a certain threshold require approval of the CCI, which seeks to prevent unfair business practices and promoter fair competition in the market place. RAM MKJ

Competition Comm approves Facebook-Jio deal

(Eds: Adding details) New Delhi, Jun 24 () The Competition Commission on Wednesday said it has cleared Facebook's proposed acquisition of 9.99 per cent stake in Jio Platforms, the digital arm of Reliance Industries. The USD 5.7 billion (Rs 43,574 crore) deal -- the single largest FDI in the technology sector in India -- was announced in April. The US social-networking major had set up a separate entity Jaadhu Holdings LLC for making the investment. The Competition Commission of India (CCI) has approved "acquisition of 9.99 per cent stake in Jio Platforms by Jaadhu Holdings LLC", according to a tweet. Jaadhu is an indirect wholly-owned subsidiary of Facebook and formed in March under the laws of the state of Delaware, US. The Facebook group offers various products and services that help people connect to their friends and family, find communities, and grow businesses, the CCI said in a release. The deal would bring together JioMart, the e-commerce venture of Asia's richest man Ambani, and Facebook's WhatsApp platform to connect consumers with neighbourhood kirana stores. WhatsApp has over 400 million users in India while Jio has more than 388 million phone subscribers. Facebook has about 250 million users in India. Jio Platforms owns and operates digital applications and holds controlling investments in certain technology-related entities. Jio Platforms also holds 100 per cent of the issued and outstanding share capital of Reliance Jio Infocomm Ltd. Deals beyond a certain threshold require approval of the CCI, which seeks to prevent unfair business practices and promote fair competition in the market place. RAM MKJ

Facebook-Jio deal gets Competition Commission nod

New Delhi, Apr 22 () Setting a new benchmark in dealmaking, the USD 5.7 billion investment by Facebook in Reliance Industries' Jio Platforms saw a bulk of the active M&amp;A dialogue, including for due diligence and agreement negotiations, happening remotely, bankers and advisors involved in the transaction said. This is one of the biggest deals that has taken place when there is a nationwide lockdown in India while same is the case for most states in the US -- the two countries where the two parties of this deal are based. The deal, which gives unlisted Jio Platforms an enterprise value of close to USD 66 billion, will help its listed parent firm Reliance Industries cut debt and also use Facebook's popular messaging platform WhatsApp as a front-end for creating an Indian e-commerce giant that could rival global giants like Amazon and Walmart. While Bank of America was the exclusive financial advisor to Facebook for this transaction, Morgan Stanley advised Reliance Industries. AZB &amp; Partners and Davis Polk &amp; Wardwell acted as counsels for RIL, while Shardul Amarchand Mangaldas was legal advisor for Facebook. Bankers involved in the deal said the active deal-specific dialogue had been going on for a few months before it became public, but broader discussion between Reliance Industries and Facebook was happening for much longer, which had started on talks for doing something together and then moved on towards getting to know each other and building the trust. "For last two months, much of the discussion, a large part of due diligence, agreement negotiations, etc, all of that have happened remotely. Even some board meetings have happened remotely. Once the active M&amp;A dialogue began, most of that has happened remotely," a top banker said. Traditionally, deals of this magnitude, especially cross-border ones, involve extensive travel and physical visits to offices and facilities by top executives as well as financial and legal advisors from both sides for an all-round vetting, including of books of accounts and financial statements. Another banker said the deal discussions from Facebook's side were mostly driven by the social media giant's finance and M&amp;A teams, while legal teams were also involved actively. The overall business leadership team of Facebook was mostly involved in discussions at the back-end with various top stakeholders of Reliance Industries group, the banker said. Reliance Industries' Chairman and Managing Director Mukesh Ambani said Reliance Jio and Facebook will look to use WhatsApp for delivering goods from local neighbourhood kirana stores to consumers before expanding collaboration into education and healthcare sectors. "The combined power of Jio's world-class digital connectivity platform and Facebook's intimate relationship with the Indian people will offer innovative new solutions to each one of you," Ambani said. "In the very near future, JioMart -- Jio's digital new commerce platform, and WhatsApp will empower nearly three crore small Indian kirana shops to digitally transact with every customer in their neighbourhood," he said. WhatsApp has over 400 million users in India while Jio has 388 million-plus phone subscribers. Facebook itself has about 250 million users in India. The bankers said the deal gives an opportunity to Facebook to establish a broader partnership in India as the country is very important for the global giant and it sees a long growth horizon in Jio, both in terms of mobile and fixed broadband businesses. During the discussions, Facebook was also impressed with the way 'Jio Homes' is connecting houses with fibre broadband and it has become even more important during the ongoing lockdown to have good fibre connection. Besides, Facebook sees a great value in a suite of apps and OTT (over the top) platforms that Jio has created, the bankers said. Facebook is also excited about a proposed collaboration between WhatsApp and Jio Mart, where it sees the messaging platform becoming a front-end technology partner for Jio Mart, among various other long-term growth opportunities. WhatsApp users would be effectively able to shop what they want, using the backend of Jio Mart. Facebook itself is not in the business of setting up stores or warehouses or moving goods etc. The deal can see Facebook and WhatsApp customer in India getting connected to retailers across the country. Another person involved in the deal said it does not put Facebook in direct competition with Amazon, Walmart or Flipkart, but Jio Mart is clearly competing with those e-commerce platforms. He clarified Facebook itself is not creating a new app or platform, but WhatsApp itself is moving towards becoming a tool for e-commerce. The bankers ruled out any immediate plans for Facebook increasing the stake from 9.99 per cent. BJ RAM

Dealmaking in times of corona: Facebook-Jio sets new benchmark for remote negotiations

New Delhi, Apr 22 () Facebook's Rs 43,574 crore-investment in Jio Platforms earned accolades from industry leaders on Wednesday, even as some internet activists raised privacy concerns. Mahindra Group Chairman Anand Mahindra said the investment is strong signal of India's economic importance and further projects the country as the centre for new growth post the coronavirus crisis. "Jio's deal with Facebook is good not just for the two of them. Coming as it does during the virus-crisis, it is a strong signal of India's economic importance post the crisis. It strengthens hypotheses that the world will pivot to India as a new growth epicentre. Bravo Mukesh!" Mahindra said in a tweet. Facebook announced an investment of USD 5.7 billion (Rs 43,574 crore) to buy 9.99 per cent stake in the firm that houses Ambani's telecom arm Jio, as the social media giant looks to expand presence in its largest market in terms of subscriber base. The deal 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). 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. The investment values Jio Platforms amongst the top five listed companies in India by market capitalization, within just three and a half years of launch of commercial services. Jio Platforms, Reliance Retail 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. Digial payments firm Paytm's founder and CEO Vijay Shekhar Sharma tweeted, "This is extraordinary at so many levels. #GODStatus." JioMart's business model will compete with Paytm services. WhatsApp has applied for a digital payment licence to facilitate UPI-based transactions. However, it is yet to receive permit due to security issues flagged by the Ministry of Electronics and IT. Former IT and telecom minister Milind Deora said the deal is a respite in the present scenario. "Welcome respite from our daily doom &amp; gloom. Mukesh Ambani always envisioned @reliancejio as a global internet company, not merely an Indian telco. As we consume more &amp; more data, Jio's partnership with @Facebook could enable India to become a world leader in AI innovation," Deora tweeted. However, Save The Internet co-founder Nikhil Pahwa said that people need to be watchful about the deal. "Jio is much more powerful than in 2015. FB (Facebook) remains the same. The government isn't as open to public opinion on issues like privacy, encryption etc anymore. Civil society is much weaker than in 2015. We will have to be watchful," Pahwa said. PRS ABMABM

Industry leaders applaud Facebook-Jio deal; say India to be growth epicentre post COVID crisis

<ul><li>The Facebook deal is part of value unlocking by RIL to cut debt. </li><li>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.</li><li>Jio was reportedly in talks with Google too but the fate of those discussions is not known. </li></ul>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 <keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword>'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 <keyword id="6355199" type="ORGANIZATION" weightage="20" keywordseo="reliance-industries">Reliance Industries</keyword> 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 was reportedly in talks with Google too 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. See also: <a href="https://www.businessinsider.in/tech/news/cognizants-ransomware-attack-is-making-peers-like-tcs-and-infosys-nervous-and-they-are-beefing-up-security/articleshow/75271532.cms">Cognizant's ransomware attack is making peers like TCS and Infosys nervous — and they are beefing up security</a> <a href="https://www.businessinsider.in/business/corporates/news/tcs-ceo-says-the-business-model-is-20-years-old-and-its-time-to-go-employee-lite/articleshow/75243124.cms">TCS CEO says the business model is 20 years old and it's time to go employee-lite</a> <a href="https://www.businessinsider.in/business/news/without-rbis-help-rupee-value-might-slump-to-80-per-dollar-says-report/articleshow/75273796.cms">Without RBI’s help, Rupee value might slump to 80 per dollar says report</a>

Mark Zuckerberg's Facebook picks up 9.9% stake in Mukesh Ambani's Jio for $5.7 billion

New Delhi, Apr 22 () Facebook on Wednesday announced an investment of USD 5.7 billion to buy 9.99 per cent stake in the firm that houses Reliance Jio -- a deal that will help billionaire Mukesh Ambani create an e-commerce giant that could rival Amazon and Walmart by linking local kirana stores and consumers over the highly popular chat service WhatsApp. The largest foreign direct investment (FDI) in the technology sector in India will give the US social-networking giant a broader foothold in its biggest global market. "Today we are announcing a USD 5.7 billion, or Rs 43,574 crore, investment in Jio Platforms, part of Reliance Industries Ltd (RIL), making Facebook its largest minority shareholder," the company said in a statement. Reliance Industries (RIL) 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). Facebook will be issued fresh equity shares and will get a board position on Jio Platforms where Ambani's twin children, Isha and Akash, are directors. Jio Platforms, which was created in October last year to house all digital initiatives of Reliance, will retain Rs 15,000 crore and use the remaining amount to pare some of its about Rs 40,000 crore debt. Transaction advisors to prepare term sheet for the deal were engaged sometime in November last year, implying commercial negotiations between the two groups would have started in July or August. Ambani had in August last year told RIL shareholders about plans to sell stake in some of the businesses with the goal of making the firm free of net debt by 2021. The deal was originally targeted for March 31, but the outbreak of COVID-19 pushed the negotiations into a virtual zone. The deal will bring together JioMart, the e-commerce venture of Ambani, and Facebook's WhatsApp platform to connect consumers with neighbourhood kirana stores, he said. WhatsApp has over 400 million users in India while Jio has 388 million-plus phone subscribers. Facebook has about 250 million users in India. This is Facebook's biggest stake buy since its 2014 acquisition of WhatsApp. The US giant has typically been buying into media and online properties till now and the investment in Jio Platforms underscores the potential it sees in a country that is rapidly embracing online payment and e-commerce as more people get smartphones. The deal would require the approval of the Competition Commission of India (CCI). No government nod is needed as the FDI is within the permissible limits. "In the very near future, JioMart and WhatsApp will empower nearly 3 crore small Indian Kirana shops to digitally transact with every customer in their neighbourhood," Ambani, 63, said in a video message after the deal announcement. "This means all of you can order and get faster delivery of day-to-day items, from nearby local shops. At the same time, small kiranas can grow their businesses and create new employment opportunities using digital technologies," he said. RIL spent almost USD 50 billion -- mostly borrowed money, on Jio, whose entry in 2016 with free calls and cheap data pushed some rivals to exit or merge to stay afloat. At the end of the December quarter, RIL had an outstanding debt of Rs 306,851 crore. It also had cash in hand of Rs 153,719 crore, bringing the net debt position to Rs 153,132 crore. Facebook said the investment "underscores our commitment to India and our excitement for the dramatic transformation that Jio has spurred in the country". Together with WhatsApp and Instagram, Facebook overall is estimated to have more users in India than any other single country, and the numbers are expected to grow. 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. 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 sold stake in its retail fuel venture to BP Plc for Rs 7,000 crore. Both Facebook and Jio said the deal is non-exclusive, which essentially means that the US firm is free to partner with other Indian or foreign company as well. The deal would give Facebook deeper access to India, the second-largest internet market after China. Facebook 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 RIL's 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. 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. The transaction, RIL said, is subject to regulatory and other customary approvals. Morgan Stanley as a financial advisor and AZB &amp; Partners and Davis Polk &amp; Wardwell as counsels advised RIL on the transaction. Shardul Amarchand Mangaldas were legal advisors for Facebook. PRS MBI ANZ SHW ABMABM

Facebook picks up 9.99 pc stake in Jio Platforms for Rs 43,574 cr

(Eds: Adding details) New Delhi, Apr 22 () Facebook on Wednesday announced an investment of USD 5.7 billion (Rs 43,574 crore) to buy a 9.99 per cent stake in Jio Platforms -- a deal that will help RIL cut debt and use WhatsApp to create an Indian e-commerce giant that could rival Amazon and Walmart. The largest foreign direct investment (FDI) in the technology sector in India will give the US social-networking firm a broader foothold in its biggest global market. "Today we are announcing a USD 5.7 billion, or Rs 43,574 crore, investment in Jio Platforms, part of Reliance Industries Ltd, making Facebook its largest minority shareholder," the company said in a statement. Reliance Industries (RIL) 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). Facebook will be issued fresh equity shares and will get a board position on Jio Platforms. Mukesh Ambani's twin children, Isha and Akash, are also part of the board. Jio Platforms, which was created in October last year to house all-digital initiative of Reliance, will retain Rs 15,000 crore and use the remaining amount to pare some of its about Rs 40,000 crore debt. Transaction advisors to prepare term sheet for the deal were engaged sometime in November last year, implying commercial negotiations between the two groups would have started in July or August. Ambani had in August last year told Reliance Industries shareholders about plans to sell stake in some of the businesses with the goal of making the firm free of net debt by 2021. The deal was originally targeted for March 31, but the outbreak of COVID-19 pushed the negotiations into a virtual zone. The deal will bring together JioMart - the e-commerce venture of Ambani, and Facebook's WhatsApp platform to connect consumers with neighbourhood kirana stores, he said. WhatsApp has over 400 million users in India while Jio has 388-plus phone subscribers. Facebook has about 250 million users in India. This is Facebook's biggest stake buy since its 2014 acquisition of WhatsApp. The US giant has typically been buying into media and online properties till now and investment in Jio Platforms underscores the potential it sees in a country that is rapidly embracing online payment and e-commerce as more people get smartphones. The deal would require the approval of the Competition Commission of India (CCI). "In the very near future, JioMart and WhatsApp will empower nearly 3 crore small Indian Kirana shops to digitally transact with every customer in their neighbourhood," Ambani, 63, said in a video message after the deal announcement. "This means all of you can order and get faster delivery of day-to-day items, from nearby local shops. At the same time, small kiranas can grow their businesses and create new employment opportunities using digital technologies," he said. RIL spent almost USD 50 billion -- mostly borrowed money, on Jio, whose entry in 2016 with free calls and cheap data pushed some rivals to exit or merge. At the end of December quarter, RIL had an outstanding debt of Rs 306,851 crore. It also had cash in hand of Rs 153,719 crore, bringing the net debt position to Rs 153,132 crore. Facebook said the investment "underscores our commitment to India and our excitement for the dramatic transformation that Jio has spurred in the country".Together with WhatsApp and Instagram, Facebook overall is estimated to have more users in India than any other single country, and the numbers are to grow. 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. 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 sold a stake in its retail fuel venture to BP Plc for Rs 7,000 crore. Both Facebook and Jio said the deal is non-exclusive, which essentially meant that the US firm was free to partner with other Indian or foreign companies as well. The deal would give Facebook deeper access to India, the second-largest internet market after China. Facebook 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 RIL's 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. 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. The transaction, RIL said, is subject to regulatory and other customary approvals. Morgan Stanley as a financial advisor and AZB &amp; Partners and Davis Polk &amp; Wardwell as counsels advised RIL on the transaction. Shardul Amarchand Mangaldas were legal advisors for Facebook. PRS MBI ANZ ANZ ANSANS

Facebook buys 9.99% stake in Jio Platforms for Rs 43,574 cr

<ul><li><keyword id="6354576" type="UNKNOWN" weightage="20" keywordseo="facebook">Facebook</keyword> has invested $5.7 billion for a 9.9% stake in <keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword>’s <keyword id="6354504" type="DEFINITION" weightage="20" keywordseo="reliance-jio">Reliance Jio</keyword> which puts the pre-deal valuation at ₹4.4 lakh crore. </li><li>The reason <keyword id="6354630" type="PERSON" weightage="20" keywordseo="mark-zuckerberg">Mark Zuckerberg</keyword>’s investment makes sense is because <keyword id="2003276" type="PERSON" weightage="20" keywordseo="Jio">Jio</keyword> is likely to be the fastest-growing segment for Reliance in the post-COVID world. </li><li>It’s also a way for Facebook to gain an edge in the Indian market which has largely been a duopoly between Facebook and Google when it comes to digital solutions for over a decade — a duopoly that has come under pressure with ByteDance’s entry.</li></ul>Facebook announced that it has invested $5.7 billion for a 9.9% stake in Mukesh Ambani’s Reliance Jio platform — India’s largest telecom player by the <a href="https://www.businessinsider.in/mukesh-ambanis-reliance-jio-collaborates-with-mark-zuckerbergs-facebook-to-launch-digital-literacy-program-in-india/articleshow/70066803.cms">number of subscribers</a> ⁠— and in early trade, Reliance Industries (RIL) <a href="https://www.businessinsider.in/india/news/mukesh-ambanis-reliance-industries-stock-gets-a-50000-crore-facebook-boost/articleshow/75285485.cms">share price jumped up as much as 7.5%</a>. This is because Facebook’s Mark Zuckerberg has paid a certain premium for a stake in Reliance Jio. The investment has valued Jio at over half of RIL’s total market capitalisation as on April 21. Jio makes up for less than a tenth of RIL’s consolidated revenue which includes other segments like retail, petrochemicals, and oil and gas exploration to name a few. <div type="image" title="RIL" msid="75286310" hostid="261" caption="&amp;lt;p&amp;gt;Reliance Industries&amp;#39; share price today morning, April 22&amp;lt;/p&amp;gt;"></div> What is the real worth of Reliance Jio? On April 14, HDFC Securities valued Jio at ₹4.8 lakh crore. For every share of RIL which was worth around ₹1,400 then, JIo was estimated to be ₹811 — 57.9% of the market cap. Deven Choksey, the managing director of KR Choksey Shares &amp; Securities told Business Insider, on April 21, that he valued Jio at ₹550 rupees a share when RIL was trading at around ₹1200. Based on a market cap ₹7.8 lakh crore, Jio would be worth ₹3.4 lakh crore by Deven's estimate. At a <a href="https://www.businessinsider.in/business/news/facebook-picks-up-10-stake-in-jio-platform-for-rs-43574-cr/articleshow/75283937.cms">pre-deal value of ₹4.4 lakh crore</a>, Zuckerberg’s buy-in is about 33% higher than what Choksey had estimated on Tuesday. This explains why RIL’s shares have spiked in a market that’s bearing down due to the impact of Coronavirus. Why Facebook needs Jio The reason Zuckerberg’s investment makes sense is because Jio is likely to be the fastest-growing segment for Reliance in the post-COVID world. Even though the Reliance subsidiary is only three-and-a-half years old, it has stolen the top spot from others like Vodafone and Bharti Airtel to become the largest telecom player in the country making it an attractive buy-in for the US company. “The recent tariff hike should still allow Jio’s EBITDA (earnings before interest, tax, depreciation and amortization) to rise 78% YoY [year-on-year] in FY21. Strong telecom and a weaker rupee will offset big cuts in petrochemicals, refining and retail as FY21 EPS rises a small 1.6% YoY,” estimates capital market and investment group, CLSA. It’s also a way for Facebook to gain an edge in the Indian market which has largely been a duopoly between Facebook and Google when it comes to digital solutions for over a decade. The duopoly that has recently been threatened by ByteDance making inroads with its mobile apps like TikTok and Resso. Entering India hand-in-hand with Jio will give Facebook access to its 370 million subscribers. There are over 451 million active internet users in the country today with the number estimated to rise beyond 600 million in the coming year, according to Internet and Mobile Association of India (<a href="https://cms.iamai.in/Content/ResearchPapers/d3654bcc-002f-4fc7-ab39-e1fbeb00005d.pdf">IAMAI</a>). What does Asia’s second-richest man get from the deal? For Ambani, CLSA forecasts that big deals like the one between Ambani and Zuckerberg will help reduce the burden of debt on RIL, which was at about $22 billion ⁠— 2.7 times its EBITDA⁠— at the end of March 2019. CLSA expects that the ratio will fall to 1.7 times in FY22 even before the Jio-Facebook deal was announced. RIL’s plan to reduce its debt also included a stake sale in its energy business to Saudi Arabia’s Aramco. But the crash in crude oil prices has cast a shadow on the stake sale to Aramco. A fresh start for Facebook This could be a new chapter for Facebook who has been trying to crack the Indian market for a while, but precious ventures like FreeBasics and internet.org did not have the <a href="https://www.businessinsider.in/tech/news/mukesh-ambani-and-mark-zuckerberg-are-looking-to-create-a-wechat-like-super-app-says-report/articleshow/75174322.cms">expected outcome</a>. It also puts Facebook head-to-head against the likes of Japan’s SoftBank, which normally holds the title of being India’s largest tech investor with over $10 billion invested across the country in unicorns like Flipkart, Ola and OYO. See also: <a href="https://www.businessinsider.in/business/news/facebook-picks-up-10-stake-in-jio-platform-for-rs-43574-cr/articleshow/75283937.cms">Mark Zuckerberg's Facebook picks up 9.9% stake in Mukesh Ambani's Jio for $5.7 billion</a> <a href="https://www.businessinsider.in/india/news/mukesh-ambanis-reliance-industries-stock-gets-a-50000-crore-facebook-boost/articleshow/75285485.cms">Facebook’s investment in Reliance Jio boosts RIL share value by ₹50,000 crore</a>

Here's why Facebook's Mark Zuckerberg is paying top dollar for a stake in Mukesh Ambani's Reliance Jio

<ul><li>Facebook founder and CEO <keyword id="6354630" type="PERSON" weightage="20" keywordseo="mark-zuckerberg">Mark Zuckerberg</keyword> opened up about his $5.7 billion investment in Asia’s richest man <keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword>’s <keyword id="6354504" type="DEFINITION" weightage="20" keywordseo="reliance-jio">Reliance Jio</keyword>. </li><li>Zuckerberg has reaffirmed his interest in India – the largest user base for Facebook and <keyword id="790242" type="COMPANY" weightage="20" keywordseo="WhatsApp">WhatsApp</keyword>. </li><li>The Facebook-Jio partnership will also become the testing ground for innovation for WhatsApp. </li></ul>Social media giant Facebook announced its first quarter earnings to report a revenue of $17.74 billion on Thursday. During the call, Facebook founder and CEO Mark Zuckerberg also opened up about his $5.7 billion investment into Reliance Jio led by Asia’s richest man Mukesh Ambani. The largest tech deal in India stoked interest along with rumours that Zuckerberg and Ambani will come together to build a super app. And now, Zuckerberg reaffirmed his interest in India – the largest user base for Facebook and WhatsApp. “By bringing together JioMart, which is Jio's small business initiative to connect millions of shops across India with WhatsApp, we think that we're going to be able to create a much better shopping and commerce experience. And there's a lot more that we can do here, and I'm looking forward to making progress with the team at Jio,” he said during the call. The country with the largest WhatsApp community With the investment in Jio, Zuckerberg is reinstating his faith in e-commerce. He said that on WhatsApp, they have started rolling out things like catalogs and working on payments through which complete transactions can take place. He also spoke about WhatsApp’s click to messaging ads for businesses. And a lot of it could possibly begin with the Jio partnership in India. “From what they have described to us, JioMart’s vision is that there are millions of small businesses and shops across India and they want to try to help get them on to a single network that you'll be able to communicate with through WhatsApp and do payments online through WhatsApp. So I think of that as a great, very large example of how we can wire up and help small businesses in the country where we have the largest WhatsApp community,” said Zuckerberg. The Facebook-Jio partnership will also become the testing ground for innovation for WhatsApp. Zuckerberg confirmed that all the products and technology that they're building to enable the Jio partnership are going to be things that they want to do around the world. ‘The need to build digital storefronts’ Interestingly Zuckerberg also spoke about how the coronavirus pandemic has resulted in many businesses shutting down their physical storefronts and this brings about the need to build digital storefronts. And this is exactly what the Reliance acquired startup Nowfloats promises to do. In December 2019, RIL invested $20 million for a majority stake in Nowfloats – a startup that helps businesses and individuals, who don’t have any web developing skills, build an online presence. Jasminder Singh Gulati, co-founder of NowFloats, tweeted about the coincidental chronology of events after Zuckerberg spoke about digital storefronts. “Our app NowFloats Boost, builds storefronts using chat, in a minute or so, with just about 5 interactive messages (it was via 4 SMS when we started in 2013). Jio acquired a majority stake in NowFloats last year,” he wrote. See Also: <a href="https://www.businessinsider.in/business/startups/news/vijay-shekhar-sharma-is-much-closer-to-a-super-app-than-mukesh-ambani-or-mark-zuckerberg/articleshow/75447200.cms">Vijay Shekhar Sharma is much closer to a super app than Mukesh Ambani or Mark Zuckerberg</a> <a href="https://www.businessinsider.in/tech/apps/news/mukesh-ambani-wants-to-be-alibaba-with-reliance-jio-super-app-and-investment-from-facebook/articleshow/75343540.cms">To be India’s Alibaba, Mukesh Ambani wants a super app with Facebook⁠— but an all-in-one app is not known to work so far</a>

On Facebook earnings call, Mark Zuckerberg opens up about his deal with Mukesh Ambani’s Reliance Jio

<ul class="summary-list"><li><keyword id="6354576" type="UNKNOWN" weightage="60" keywordseo="facebook">Facebook</keyword> announced it would invest $5.7 billion in <keyword id="6354504" type="DEFINITION" weightage="60" keywordseo="reliance-jio">Reliance Jio</keyword>, <keyword id="3658" type="COUNTRY" weightage="60" keywordseo="India">India</keyword>'s popular mobile internet service.</li><li>The multi-billion-dollar stake makes Facebook the largest minority shareholder in the internet service, which is a part of Reliance Industries Limited.</li><li>In the past three years, <keyword id="2003276" type="PERSON" weightage="60" keywordseo="Jio">Jio</keyword> has brought hundreds of millions of people in the country online, making the country a vital market after India "overtook the US last year to become the world's second-largest smartphone market after China by unit shipments," The Financial Times reported.</li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories</a>.</li></ul>Facebook announced Tuesday that it would invest $5.7 billion in Reliance Jio, India's popular mobile internet service that brought hundreds of millions in the country online in three years.The multi-billion-dollar stake makes Facebook the largest minority shareholder in the internet service, which is a part of Reliance Industries Limited."This investment underscores our commitment to India, and our excitement for the dramatic transformation that Jio has spurred in the country," Facebook said in a statement. "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."The Financial Times <a href="https://www.ft.com/content/a1ca0569-7ef7-49c8-b88e-72b792eefc62">first reported</a> that Facebook was eyeing the investment back in late March, as Reliance's burden of debt grew after expanding Jio. The Facebook-Jio deal is part of an effort aimed at relieving the company of its debt by March of next year, according to The Financial Times report.Facebook said one focus of the collaboration will be to create "new ways for people and businesses to operate more effectively in the growing digital economy," like supplementing Jio's small business initiative with the "power of WhatsApp" to help businesses and shop connect on a larger scale."They account for the majority of jobs in the country, and form the heart and soul of rural and urban communities alike," the statement read. "In the face of the coronavirus, it is important that we both combat this global pandemic now, and lay the groundwork to help people and businesses in the years to come."Read the original article on <a href="https://www.businessinsider.com/facebook-invests-in-jio-india-mobile-internet-service-2020-4">Business Insider</a>

Facebook to invest $5.7 billion in Reliance Jio, India's popular mobile internet service

<ul><li>Facebook has bought 9.9% in Reliance Jio for $5.7 billion. </li><li>The bigger reason for the buy-in is how <keyword id="4878801" type="PERSON" weightage="20" keywordseo="whatsapp-pay">WhatsApp Pay</keyword> and Reliance Retail can use this partnership to help each other out. </li><li>The payments platform can use Reliance’s massive network of offline stores to monetise its data, while Reliance can use the ‘household’ name to finally yield success with a seamless payments system. </li></ul>Everyone is excited about the deal between Facebook and Reliance Jio in hope that it will result in a new ‘super app’ for India. However, the partnership between Facebook and Reliance Jio has a few more layers than what is visible at first glance. The secret sauce to this deal is the potential for Facebook’s payment solutions — <a href="https://www.businessinsider.in/whatsapp-payments-launching-in-india-against-paytm-google-pay-phone-pe-for-1-trillion-opporunity/articleshow/70376672.cms">WhatsApp Pay</a>. And, this is the reason why <keyword id="6354630" type="PERSON" weightage="20" keywordseo="mark-zuckerberg">Mark Zuckerberg</keyword> is <a href="https://www.businessinsider.in/tech/news/heres-why-facebooks-mark-zuckerberg-is-paying-top-dollar-for-a-stake-in-mukesh-ambanis-reliance-jio/articleshow/75286331.cms">paying top dollar for a stake</a> in <keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword>’s Reliance Jio. “Our goal is to enable new opportunities for businesses of all sizes, but especially for the more than 60 million small businesses across India,” said Facebook’s chief revenue officer, David Fisher, and the VP and managing director of India, Ajit Mohan in a <a href="https://about.fb.com/news/2020/04/facebook-invests-in-jio/">post.</a> Zuckerberg’s social network has <a href="https://www.businessinsider.in/business/news/facebook-picks-up-10-stake-in-jio-platform-for-rs-43574-cr/articleshow/75283937.cms">bought a 9.9% stake</a> in Reliance’s telecom venture for $5.7 billion. However, the second richest man in India — Mukesh Ambani — also owns the country’s biggest retail chain, Reliance Retail. It will now be a force of power to ensure that WhatsApp Pay has a chance of success in the Indian market despite being such a late entrant. “PayTM, PhonePe and other players will be impacted. They don’t have as much e-commerce as these guys will have. That will make a big difference,” Vikram Sud, an independent director at DBS told Business Insider. Retaining employment at brick-and-mortar stores rather than wipe it out “This is an amazing partnership on the payments side. Whatsapp Pay did not have the commercial sides of it as Whatsapp was trying to creep into the business. Now, between Whatsapp, Instagram and Facebook — all the commerce can be done through Whatsapp Pay,” said Sud. Jio’s plan to <a href="https://www.businessinsider.in/business/news/mukesh-ambani-owned-reliance-retail-revenue-estimate-from-kirana-stores/articleshow/71643159.cms">pull all kirana stores</a> and combine it with this payment mechanism will be a massive competition to Amazon and all other e-commerce players. You will get delivery from local stores while also helping them retain their employment unlike the advent of Amazon and Walmart, who have been <a href="https://www.businessinsider.in/if-were-living-through-a-retail-apocalypse-why-are-e-commerce-leaders-like-amazon-alibaba-and-jd-com-so-focused-on-building-brick-and-mortar-stores/articleshow/70849067.cms">chipping away</a> at the brick-and-mortar business. “By bringing together JioMart, Jio’s small business initiative, with the power of WhatsApp, we can enable people to connect with businesses, shop and ultimately purchase products in a seamless mobile experience,” said Facebook. And that’s the play that global IT giant is primarily aiming for, according to a senior industry analyst. They weren’t able to monetise it but that doesn’t change the fact that they're sitting on a huge pile of data. This is something they will now be able to leverage and monetise by using Jio Mart's reach. It’s a win-win situation for Ambani and Zuckerberg “In my mind, Whatsapp Pay and Jio money will all hopefully get rolled into one. It will just make it quicker since there is nobody in India that doesn't have WhatsApp,” said Sud. WhatsApp has been testing its payments platform in India since 2018. It was only available to a million users under a partnership with ICICI Bank. However, the <a href="https://www.businessinsider.in/tech/news/whatsapp-spyware-hack-raises-security-concerns-around-its-upcoming-payments-service/articleshow/71888781.cms">concern for policymakers</a> was whether not it will be responsible to allow a social messaging app — known for being a vehicle of fake news or what’s more commonly called the ‘WhatsApp University’ — to also integrate payments into its platform. In February this year, two years after the company’s first trial, WhatsApp finally got the <a href="https://www.businessinsider.in/tech/news/india-whatsapp-pay-global-rollout-zuckerberg/articleshow/73760554.cms">approval </a>to roll out its digital payment service in a phased manner. In the first phase, it will offer its payment services to 10 million users in the country. See also: <a href="https://www.businessinsider.in/india/news/mukesh-ambanis-reliance-industries-stock-gets-a-50000-crore-facebook-boost/articleshow/75285485.cms">Facebook’s investment in Reliance Jio boosts RIL share value by ₹50,000 crore</a> <a href="https://www.businessinsider.in/tech/news/heres-why-facebooks-mark-zuckerberg-is-paying-top-dollar-for-a-stake-in-mukesh-ambanis-reliance-jio/articleshow/75286331.cms">Here's why Facebook's Mark Zuckerberg is paying top dollar for a stake in Mukesh Ambani's Reliance Jio</a>

WhatsApp is the secret sauce in the deal between Facebook and Reliance Jio

New Delhi, Apr 27 () Billionaire Mukesh Ambani's Reliance Industries has started limited test use of WhatsApp to connect customers to grocery stores, days after Facebook decided to invest USD 5.7 billion in digital assets controlled by the company. JioMart, an e-commerce venture of Reliance Retail, "has already started interacting with customers on WhatsApp for grocery orders" in Navi Mumbai, Thane and Kalyan, Credit Suisse said in a report. "The customer initiates the interaction on WhatsApp, checks out the grocery order on JioMart webpage, gets connected with a retail store on WhatsApp and then customer picks up the order from Kirana and pays in cash," it said, adding the model is likely on delivery and completion of the transaction on one app. The Facebook deal will help Ambani set up a digital platform to take on Amazon and Walmart's Flipkart in an e-commerce market that KPMG says is likely to grow to USD 200 billion by 2027. The deal benefits Facebook via "partnership with the largest retail player in India, where partnership starts with grocery, and later could be extended to medicine distribution, fashion and lifestyle stores, food delivery, etc," Credit Suisse said in a report. Also, Reliance Jio, with its 388 million telecom users, could provide telecom infrastructure for various Facebook's solutions, it said. For RIL, the large user base of WhatsApp (400 million) could significantly accelerate the adoption of the JioMart app besides it would leverage Facebook's experience to monetize data through advertising. "The key advantage is not only the large base of WhatsApp users in India but the amount of time spent on the app per day by an average user. "This would catapult Jio into the attention of the large user base, thereby addressing the first key barrier of awareness post-launch of its New Commerce offering," Credit Suisse said adding this was based on assumption that at some stage, JioMart could be a mini-app within WhatsApp (a concept similar to WeChat mini-programmes) which would avoid new 400 million downloads of JioMart and give JioMart immediate access to 400 million users of WhatsApp for grocery. It is likely that the partnership could be extended beyond grocery to other retail products too. "Deal cash flow would help RIL bring down overall net debt and help to move towards its target of achieving zero net debt by March 2021," it added. J P Morgan in a separate report said it believes that initially WhatsApp would be integrating a 'Jio Shopping bot' on the API, and allow users to add the bot to their contacts. Once added, users can search for a local business, see available products in a catalogue, and purchase the product in the thread or in the shop. The Facebook deal should help accelerate Jio's ability to further evolve into a full-stack player across India's e-commerce ecosystem, it said. The acquisition of a 9.99 per cent stake in Jio Platforms Ltd for USD 5.7 billion represents the second-largest investment of Facebook to date (the largest was USD 19 billion WhatsApp acquisition in February 2014). This corresponds to a quarter's worth of free cash flows for the firm. "Nevertheless, it still represents a significant step for Facebook as this may strengthen its evolving business model in commerce," Credit Suisse said. ANZ MR

Reliance starts using WhatsApp for grocery deliveries but model to evolve

(Eds: Adding word in header) New Delhi, Apr 22 () Reliance Industries' telecom arm Jio and social media major Facebook will continue to oppose each other over internet calls and messaging services despite the Rs 43,574-crore investment deal signed between the two companies. Telecom operators, including Reliance Jio, have been demanding "same service same rules" regime which means that mobile applications providing calls and messaging services should also be made to comply with set of rules that are mandatory for mobile service providers. Mobile app companies providing complimentary calls and messages have opposed the same. "Both Facebook and Jio are independent companies. We will have our independent views. There will be areas where we will collaborate and there will be areas where we will differ and compete. There is no change in what we think about business. We don't expect it from Facebook either. So no changes or nothing to really comment on those aspects," Reliance Jio head of strategy Anshuman Thakur told . He was replying to a question that whether there will be change in the stance of the company with Facebook coming on the board of Jio Platforms with 9.9 per cent stake. Facebook too echoed the same thought that differences will continue on the issue of "same service same rules" between both the companies. "As excited as we are about collaborating, I think we also expect that there will be areas where we compete. We are showing alignment on opportunity to work together to have positive impact for small businesses particularly. I do agree that there will be areas where we disagree as well," Facebook India vice president and managing director Ajit Mohan said. Earlier in the day, Facebook announced an investment of USD 5.7 billion (Rs 43,574 crore) to buy a 9.99 per cent stake in the firm that houses Ambani's telecom arm Jio as the social media giant looks to expand presence in its largest market in terms of subscriber base."We have made a minority investments in Jio Platforms. We are excited about that canvas. We do think it will be really good for the ecosystem at large. We also expect that there will be areas where we won't have same point of view," Mohan said.Facebook will get a seat on board on Jio Platforms Ltd, the company it is investing in, along with an observer seat.Once the investment comes in, Rs 15,000 crore will be retained in Jio Platforms Ltd while the rest will be used to redeem OCPS (optionally convertible preference shares) of Reliance Industries Ltd."In that sense, the entire amount does go to reduce the debt of the Group... Jio Platforms Ltd has been valued at an enterprise value of Rs 4.62 lakh crore. The debt in the company is around Rs 40,000 crore. With this investment, Rs 15000 crore will be retained in the company and balance will be used to redeem OCPS investments of RIL in this company," he said.In October, Jio Platforms transferred most of the debt to its parent firm Reliance Industries Limited. The net debt of Jio Platforms will correspondingly reduce because of cash which is retained in the company, Thakur said."Jio Platforms now has very little debt which mostly pertains to spectrum liability and some commercial business," Thakur said. Jio Platforms, Reliance Retail 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. Jio Mart will look at involving local businesses starting with grocery shops before expanding in to other categories like education, health, etc. RIL Chairman and Managing Director Mukesh Ambani after announcement of the deal said that Jio's digital connectivity platform and Facebook's relationship with the Indian people will offer innovative new solutions to all individuals in the country. "In the very near future, JioMart-Jio's Digital new commerce platform and Whatsapp will empower nearly 3 crore small Indian Kirana shops to digitally transact with every customer in their neighbourhood. This means all of you can order and get faster delivery of day-to-day items, from nearby local shops. At the same time small kiranas can row their businesses and create new employment opportunities using digital technologies," Ambani said. Thakur said that the beta version of Jio Mart has already been launched in parts of Mumbai and there is no definite time-line on it becoming completely operational due to uncertainty around the lockdown period. "We have been working on. Beta phase, in fact we have rolled out to a number of merchants in the new Bombay area and few other places. Things have been impacted because of the lockdown. Trials had to be slowed down. One doesn't know how the lockdown will be revoked. For now beta trials are going and they are going good. This will be across categories. Grocery is one segment where we are providing service to," he said. When asked about who will handle the payment part of Jio Mart app as the government has not yet allowed Whatsapp to carry out digital payments, Thakur said that the app leverages a system developed by Reliance Retail. "Jio Mart is Reliance Retail business and Jio mart has its own digital platform on which it is enabling customers and merchants to transact. We will work with Whatsapp to use the Whatsapp platform as a means to bring the merchants and customers more seamlessly," Thakur said.Facebook is also testing alternate technologies to provide internet services. The company tried to start trials for alternate technologies but could not go ahead because of regulatory reasons. Mohan declined to comment on testing those alternate technologies on the Jio network but briefly mentioned that 5G technology will be one of the area where both the entities can collaborate.He said that both the companies are trying to expand the digital ecosystem. "Why we have invested in Jio is that we are excited about what Jio has done in the last four years and what we can do. If we do bring in that energy we can bring new opportunities. Even without payments we think that the collaboration can bring a lot of value to the people," Mohan said. He said that the construct of collaboration around Jio Mart is not an exclusive arrangement between the two companies. The deal signed between the two companies needs only approval of Competition Commission of India but due to uncertainty around lockdown, Thakur said that definite time to close the deal cannot be committed. "This one comes under the automatic route for FDI. RJIL is the only licence business where 49 per cent is automatic. Only approval that we require is from CCI. We will soon approach them with our application and then whatever time it takes. They will settle the transaction and let us know," he said. With this agreement, Facebook has become the largest partner of Jio on board.Jio Platforms houses digital services of the group and 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. PRS MBI MKJMKJ

Jio, Facebook to continue opposing each other over internet calls, messages

New Delhi, Apr 22 () Facebook's move to pick up about 10 per cent stake in Jio Platforms will accelerate Jio's digital monetisation drive and put Reliance Industries (RIL) on course to turn net debt-free by March 2021, analysts said on Wednesday. "RIL had restructured its digital business into one consolidated wholly-owned subsidiary - Jio Platforms - which would host all the digital initiatives of the firm, including Jio digital services (mobile, broadband), apps, tech capabilities (AI, Big Data, IoT) and investments (like Den, Hathway)," Credit Suisse said in a note. It said that Facebook's investment into this entity will further Reliance Industries' digital initiatives and will help in deleveraging. "...The deal will aid in achieving net debt-free (target) by March 2021. As of December 31, 2019, net debt for the group stands at Rs 1,531 billion (Rs 1.53 lakh crore) and with Facebook's investment, this should put RIL on course to be net debt free by Mar-2021," it said. The announcement includes commencement of a partnership among JioMart (platform of RIL's new commerce initiative), Reliance Retail and WhatsApp, it noted. "Currently, new commerce is under purview of Reliance Retail and outside of Jio Platforms. The partnership will entail leveraging the messenger platform to facilitate new commerce transactions between a consumer and a kirana store," Credit Suisse said. In similar vein, Bernstein said the partnership is strategic for both companies. "The investment in Jio is one of the biggest investments Facebook can make. The transaction fits with their recent push to build themselves and experiment more and provides a closed network of 388 million users to test on, proof point around the already announced partnership to build and test a WeChat like app," it said. "Facebook has already launched WhatsApp as customer service/social commerce tool in India allowing brands and retails to talk directly to customers/prospects, this can strengthen that offering both for 60 million small merchants on JioMart but also for Reliance Jio itself," Bernstein added. 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. MBI ANSANS

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