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<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

<ul><li>The Competition Commission of India has approved Facebook’s $5.7 billion acquisition in Jio Platforms.</li><li>The social media giant has acquired 9.99% in Mukesh Ambani-led Jio Platforms.</li></ul>The Competition Commission of India (<keyword id="47183" type="ORGANIZATION" weightage="20" keywordseo="CCI">CCI</keyword>) on Wednesday said it has approved Facebook's proposed acquisition of 9.99 per cent stake in Jio Platforms. In April, Facebook announced an investment of USD 5.7 billion (Rs 43,574 crore) in Jio Platforms. The acquisition was to be done through Jaadhu Holdings LLC. In a tweet, the CCI said it has approved "acquisition of 9.99 per cent stake in Jio Platforms by Jaadhu Holdings LLC". SEE ALSO: <a href="https://www.businessinsider.in/business/news/reliance-gets-1-5-billion-from-saudi-for-jio-even-as-the-15-billion-aramco-deal-waits-in-the-wings/articleshow/76444365.cms">Reliance gets $1.5 billion from Saudi for Jio even as the $15 billion Aramco deal waits in the wings</a> <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-airtel-share-price-may-gain-as-broadband-plan-rates-fall/articleshow/76525187.cms">Home broadband bills could come down if government cuts its share⁠ — big boost for Reliance Jio and Airtel</a> <a href="https://www.businessinsider.in/business/news/reliance-may-break-up-with-ipos-of-jio-retail-business/articleshow/76548936.cms">Reliance could soon be ready with the IPOs of Jio and its retail business</a>

Facebook's 9.99% stake purchase in Jio Platforms gets CCI nod

New Delhi, Apr 30 () Days after selling a stake in its digital arm to <keyword id="6354576" type="UNKNOWN" weightage="20" keywordseo="facebook">Facebook</keyword> for USD 5.7 billion, <keyword id="10926" type="CITY" weightage="20" keywordseo="Reliance">Reliance</keyword> Industries on Thursday said it is in talks with other strategic and financial investors for a similar-sized deal that will help cut debt at the unit that houses India's youngest but biggest mobile operator. Without revealing the identity of the companies, RIL in its fourth-quarter earnings statement said the investment would be announced in the coming months. "In addition to the FB investment, the board was informed that RIL has received strong interest from other strategic and financial investors and is in good shape to announce a similar-sized investment in the coming months," it said. Ahead of last week's announcement of Facebook buying a 9.99 per cent stake in Jio Platforms Ltd, there were unconfirmed reports of the company being in parallel discussions with Google. The potential interest, the company said, establishes "the attractiveness of Jio Platforms to the world and is a strong validation of RIL's capability to conceive large-scale disruptive greenfield businesses". "With strong visibility to these equity infusions, the board was informed that RIL is set to achieve net-zero debt status ahead of its own aggressive timeline," the statement said. Billionaire <keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword> is looking to replicate the success of WeChat and Alipay in China as multipurpose superapps -- platforms with integrated chat functions, payment and financial services and online shopping -- 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 tie-up brings together WhatsApp, India's most popular app with about 400 million users, and Jio's mobile services with 388 million subscribers. WhatsApp would be integrating a 'Jio Shopping bot' on the API (application programming interface), 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. Earlier this week, JioMart, an e-commerce venture of Reliance Retail, opened a business account on Facebook's WhatsApp. It connects WhatsApp users to JioMart through automated text messaging and complete order delivery through local grocery or Kirana stores. Although the service is only available in three cities, the experiment offers an example of how the WhatsApp-JioMart combination will function as a multipurpose mobile service connecting hundreds of millions of consumers with local Kirana stores. The Facebook deal as also the one indicated by the company on Thursday along with a potential sale of 20 per cent stake in Reliance's oil-to-chemical business to Saudi Aramco for an asking of USD 15 billion would help Ambani bring down overall net debt at his group and help to move towards his target of achieving zero net debt by March 2021. 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). The largest foreign direct investment in the technology sector in India is also expected to give the US social-networking firm a broader foothold in its biggest global market. Facebook will be issued fresh equity shares and will get a board position on Jio Platforms. 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. "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, had said in a video message after the mega-deal announcement on April 22. "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 had said. MBI ANZ MKJ

After Facebook, Reliance in talks with other investors to offload more stake

New Delhi, Mar 25 () Social media major Facebook is reportedly planning to buy 10 per cent stake in the country's biggest telecom company Reliance Jio. Reliance Industries Limited had set a target to make its telecom services arm Jio debt-free by March 31, 2020. According to Financial Times, Facebook is looking at buying a multibillion-dollar stake in Reliance Jio which has been valued at USD 60 billion by analysts at Bernstein. Both Reliance Jio and Facebook did not comment on the report. The international financial daily said that the lockdown may have an impact on the timing of the deal. Reliance Industries (RIL) in October had announced to set up a new subsidiary to bring all its digital initiatives and apps under a single entity, and infuse Rs 1.08 lakh crore equity into this new unit. Jio apps like JioTV, JioCinema, JioNews etc are to be brought under this new entity in a move to consolidate digital platforms into an elegant capital structure to increase the attractiveness and simplify the structure for possible strategic investors. On March 18, RIL took over some of the debt of Reliance Jio but the company neither disclosed financial details of the transaction nor the names of creditors. In March last year, assets worth about Rs 1.25 lakh crore were demerged from RJIL to Infrastructure Investment Trusts (InvITs) aimed at optimising operational efficiencies and better monetisation of core digital connectivity platform, tower and fibre passive infrastructure. PRS MRMR

Facebook likely to buy 10% stake in Reliance Jio

<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 class="summary-list"><li><keyword id="6355199" type="ORGANIZATION" weightage="60" keywordseo="reliance-industries">Reliance Industries</keyword> has offered to sell <keyword id="18635" type="CITY" weightage="60" keywordseo="Amazon">Amazon</keyword> a 40% stake in its <keyword id="6354851" type="UNKNOWN" weightage="100" keywordseo="retail">retail</keyword> arm in a deal that could be worth $20 billion, a source told <a href="https://www.bloomberg.com/news/articles/2020-09-10/reliance-said-to-offer-20-billion-stake-in-retail-arm-to-amazon?srnd=premium">Bloomberg News</a>.</li><li><keyword id="58448" type="COMPANY" weightage="60" keywordseo="Reliance-Retail">Reliance Retail</keyword> is <keyword id="3658" type="COUNTRY" weightage="60" keywordseo="India">India</keyword>'s largest retailer, and owns more than 11,000 stores.</li><li>It also owns e-commerce platform JioMart, which is a growing threat to Amazon in India.</li></ul>India's <a href="https://www.forbes.com/global2000/#7aeb3d4f335d">largest company,</a> <keyword id="10926" type="CITY" weightage="60" keywordseo="Reliance">Reliance</keyword> Industries, has offered to sell 40% of its retail arm to Amazon for around $20 billion, <a href="https://www.bloomberg.com/news/articles/2020-09-10/reliance-said-to-offer-20-billion-stake-in-retail-arm-to-amazon?srnd=premium">Bloomberg News reported</a>.This deal would be <a href="https://markets.businessinsider.com/news/stocks/reliance-reportedly-mulls-20-bln-stake-sale-in-retail-unit-to-amazon-1029576696#">one of Amazon's largest-ever investments</a>. Reliance Retail owns e-commerce platform JioMart, a major, fast-growing rival to Amazon in India. In June, Amazon was reportedly considering buying a <a href="https://www.businessinsider.com/amazon-could-team-up-with-jiomart-in-india-2020-7">9.9% stake</a> in Reliance Retail, India's largest retailer by revenue. This followed an August 2019 report that said Amazon might acquire <a href="https://www.businessinsider.com/amazon-in-talks-to-buy-stake-india-reliance-retail-2019-8">a 26% stake</a>.Bloomberg's report, which cites a personal familiar with the matter, says no final decision has been made on the potential deal, and a <a href="https://www.reuters.com/article/us-reliance-investment-amazon-com/reliance-approaches-digital-unit-backers-to-invest-in-retail-arm-sources-idUSKBN2610V7">Reuters report</a> named Saudi Arabia's Public <keyword id="6355120" type="UNKNOWN" weightage="60" keywordseo="investment">Investment</keyword> Fund (PIF) and Abu Dhabi state fund Mubadala Investment Company as other potential buyers.Reliance Retail owns more than 11,000 stores, including convenience shops, supermarkets, apparel, and electronics. Most are in India, but it also owns Hamleys in London – the oldest and largest toy shop in the world.It turned over <a href="https://www.ril.com/DownloadFiles/Retail/RRL%20Annual%20Report%202019-20.pdf">around $20 billion</a> in the year to March 2020, an increase of 27% on the year before.Reliance has recently expanded into online grocery delivery. In May 2020, it launched JioMart from its subsidiary Jio Platforms, and it plans to expand beyond groceries, which would make it even more of a threat to Amazon. Amazon's investment in Reliance Retail could allow it to collaborate with JioMart, rather than compete.Reliance Retail is a subsidiary of the conglomerate Reliance Industries, which has businesses in the energy, petrochemicals, textiles, natural resources, and telecommunications sectors.It is led by billionaire Mukesh Ambani – Asia's richest man, with a <a href="https://www.businessinsider.com/india-jio-mukesh-ambani-global-international-sixth-wealthiest-person-2020-7?amp">$72 billion net worth</a>.Reliance has already raised $20 billion of investments so far in 2020. This includes Facebook investing <a href="https://www.businessinsider.com/facebook-invests-in-jio-india-mobile-internet-service-2020-4">$5.7 billion investment</a> into its mobile internet service, Jio Platforms, in April. This was followed by a <a href="https://www.businessinsider.com/google-invest-billions-india-telecoms-reliance-jio-2020-7">$4.5 billion investment from Google</a> in July — and together, Google and Jio have announced plans to produce and sell <a href="https://www.india.com/technology/reliance-jio-to-launch-10-crore-smartphones-this-year-report-4136110/">more than 100 million low-cost smartphones</a> in India to compete with Chinese firms. Reliance Retail also announced its acquisition of rival Future Group's retail arm in August, <a href="https://www.businessinsider.com/reliance-to-buy-future-groups-retail-arm-for-338-billion-2020-8">for $3.38 billion</a>, and on Wednesday announced a $1 billion investment from US private equity firm <a href="https://markets.businessinsider.com/news/stocks/reliance-reportedly-mulls-20-bln-stake-sale-in-retail-unit-to-amazon-1029576696#">Silver Lake Partners</a>, which took a 1.75% equity stake.

India's largest company, Reliance Industries, has reportedly offered Amazon a 40% stake in its retail arm for $20 billion

<ul><li><keyword id="6354576" type="COMPANY" weightage="20" keywordseo="facebook">Facebook</keyword> and Reliance Industries are reportedly in talks to create a multipurpose app for India. </li><li>The app will allow users to chat, play games, shop online, book tickets and more. </li><li>The discussions have reportedly been delayed due to the Coronavirus pandemic. </li></ul>Reliance Industries and Facebook are reportedly in talks to create a multipurpose app for India that may change how Indians chat, play games and make payments. According to an Economic Times <a href="https://economictimes.indiatimes.com/tech/software/ril-facebook-weigh-creating-a-super-app/articleshow/75169476.cms">report</a>, the two companies are looking to create a <keyword id="1160904" type="COMPANY" weightage="20" keywordseo="WeChat">WeChat</keyword> like app for the country. The report suggests that both the companies would bring in technical knowhow, funding and domain expertise for the project. The discussions for the project have reportedly been delayed due to the Coronavirus pandemic. “This is going to be a defining partnership, and it’s not just a financial investment. The deal is about creating value and a business that would differentiate both Facebook and Reliance,” said a person familiar with the matter. <keyword id="790242" type="COMPANY" weightage="20" keywordseo="WhatsApp">WhatsApp</keyword> may soon offer games, digital payments and more Facebook is looking to leverage its popular messaging app WhatsApp which crossed 2 billion users earlier this year. While the company has not revealed the number of users in India, it had reported 400 million users in July 2019. The multipurpose app will reportedly be built along the lines of WeChat that combines digital payments, games, social media, ticket booking and more in one app. Users will be able to chat, buy groceries from Reliance Retail stores, shop on the company’s Ajio platform or make payments using JioMoney on the new multipurpose app. It’s not clear if the companies will launch a new app for this or add these new functions to WhatsApp. Facebook may invest in Reliance Jio Mark Zuckerberg-led Facebook is <a href="https://www.businessinsider.in/business/news/why-facebook-owner-mark-zuckerberg-wants-stake-in-mukesh-ambani-owned-reliance-jio/articleshow/74803994.cms">reportedly</a> looking to acquire a 10% stake in Mukesh Ambani-owned Reliance Jio. However, a source told Economic Times that the situation is ‘fluid’ and it is unclear what the final structure would look like. “A new company could be created – where both the players could invest; or Facebook could invest in Reliance Jio and Reliance Retail, and that is the way the partnership could be formed for the new venture,” the source said. The two companies have reportedly hired top consultants and lawyers in the US to explore various aspects of the deal, including legal and taxation matters. See also: <a href="https://www.businessinsider.in/business/news/why-facebook-owner-mark-zuckerberg-wants-stake-in-mukesh-ambani-owned-reliance-jio/articleshow/74803994.cms">Facebook's next investment in India may be Mark Zuckerberg's most important — in Asia's richest man Mukesh Ambani</a> <a href="https://www.businessinsider.in/business/corporates/news/mukesh-ambanis-reliance-jio-becomes-the-largest-telco-by-revenue-and-subscribers-as-industry-shows-signs-of-recovery/articleshow/73667566.cms">Mukesh Ambani’s Reliance Jio becomes the largest telco by revenue and subscribers - as industry shows signs of recovery</a>

Mukesh Ambani and Mark Zuckerberg are looking to create a WeChat like super-app says report

<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

(Eds: Adding details) New Delhi, Jul 30 () Reliance Industries Ltd (RIL) on Thursday reported record net profit of Rs 13,248 crore in June quarter after one-time gain from stake sale as well as bumper telecom revenues cushioned COVID-19-hit earnings from refining, petchem and retail segments. The net profit in April-June was 30.6 per cent higher than it was in the same period a year back, and bettered the company's previous best of Rs 11,640 crore earning in October-December 2019, the company said in a statement. The oil-to-telecom conglomerate said it had a one-time gain of Rs 4,966 crore from sale of 49 per cent stake in fuel retailing venture to BP plc. This together with 183 per cent jump in Reliance Jio's standalone net profit to Rs 2,520 crore covered up drop in earnings from mainstay segments. EBITDA (earnings before interest, taxes, depreciation, and amortisation) declined by 11.8 per cent to Rs 21,585 crore "due to lower contribution from oil-to-chemical (O2C) business, which was impacted by significant demand destruction and margin pressure across transportation fuels and polyester chain". Also, lower realisation in the export market also impacted profitability. "Closure of stores and restrictions on operations across the country due to COVID-19 contributed to a decrease in EBITDA of Retail business. This was partially offset by an increase in EBITDA of Digital services business due to improved margins and continued subscriber momentum," it said. RIL Chairman Mukesh D Ambani said: "The severe demand destruction due to global lockdowns impacted our hydrocarbons business but the flexibility in our operations enabled us to operate at near normal levels and deliver industry-leading results". He said the company raised record funds during the quarter despite COVID-19 lockdown. The company raised Rs 53,124 crore through a rights issue and sold near 33 per cent stake in Jio Platforms Ltd - the firm that houses telecom business and apps - to likes of Facebook and Google for Rs 1,52,056 crore. It also sold a 49 per cent stake in the fuel retailing business to BP for Rs 7,629 crore. "We completed the largest fund raise in Indian corporate history in this quarter," Ambani said. With coronavirus lockdown shutting down malls and markets for the most part of the quarter, Reliance Retail - which operates consumer electronic stores, fashion outlets, and grocery stores - saw revenues dip 17 per cent to Rs 31,633 crore and segment pre-tax profit fall 47.4 per cent to Rs 1,083 crore. Petrochemical revenues declined 33 per cent due to lower price realisations with disruptions in local and regional markets due to the pandemic outbreak. Oil refining revenues more than halved to Rs 46,642 crore after the company earned its lowest margin in a decade on turning every barrel of crude oil into fuel. Gross refining margin of USD 6.3 per barrel compared to USD 8.1 GRM a year back and USD 8.9 per barrel in the preceding quarter. The operator of the world's largest oil refining complex saw pre-tax earnings from the business fall 26 per cent to Rs 3,818 crore due to lower throughput. Reliance Jio, the group's telecom arm, saw subscriber base swell to 398.3 million from 387.5 million at March-end. Earning per subscriber rose to Rs 140.3 per month from Rs 130.6 per month in the previous quarter. State-owned Indian Oil Corp (IOC) holds the distinction of posting the highest ever quarterly profit by any Indian firm when it had reported a net profit of Rs 14,512.81 crore in January-March 2013. ANZ ANZ BAL

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