Reliance Industries Limited, Jio Platforms Limited, and Facebook, Inc. today announced the signing of binding agreements for an investment of ₹ 43,574 crores by Facebook into Jio Platforms.
This investment by Facebook values Jio Platforms at ₹ 4.62 lakh crore pre-money enterprise value ($65.95 billion, assuming a conversion rate of ₹ 70 to a US Dollar). Facebook’s investment will translate into a 9.99% equity stake in Jio Platforms on a fully diluted basis.
Shares of Reliance Industries Ltd (RIL) jumped 8.3% in early deals on Wednesday after the company announced a stake sale of its digital business to Facebook Inc. At 10:21 am, shares of Reliance Industries traded at ₹1,318.15, up 6.64% on the BSE.
Reliance Industries has mopped up Rs 8,500 crore from the sale of non-convertible debentures, cashing in on the cheaper funds flooding the debt market that is starved of quality paper, priced it at 7.20 percent. The debt market is flushed with money after the Reserve Bank of India (RBI) opened a special repo operation called the targeted long term repo operations (TLTRO) on March 27, which offers banks funds at the repo rate which is currently pegged at 4.40 percent.
Furthermore, the statement said the partnership assumes special significance for India in the wake of the severe disruptions caused by the coronavirus pandemic in the Indian and the global economy.
“In the post-COVID era, comprehensive digitalisation will be an absolute necessity for revitalisation of the Indian economy,” the statement said.
“It is our common belief and commitment that no Indian should be deprived of the tremendous new opportunities, including for new employment and new businesses, in the process of India’s 360-degree digital transformation.”
Concurrently to the investment, 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 and to support small businesses on WhatsApp.