On April 21, 2020; Facebook announced a $5.7 billion (INR 43,574 crore) investment in India's leading telecom company Jio, a part of Reliance Industries Limited (RIL), making Facebook Jio's largest minority shareholder. Facebook now has a 9.99% stake in Mukesh Ambani's Reliance Jio. This will propel Jio as the fifth largest firm, taking into account the market capitalization of listed companies in India.
"This investment underscores our commitment to India and our excitement for the dramatic transformation that Jio has spurred in the country," Facebook said. The telecom leader Reliance Jio has risen in a short period of three years as one of the largest telecom networks with a user base of 370 million.
Facebook Inc, the American social media giant, will soon sign the binding deal, which will be the country's first Foreign Direct Investment (FDI) for a minority stake. According to Facebook, one of the focus of this collaboration will be creating new ways for people and businesses to operate more effectively in the growing Digital Economy of India. They are planning to bring JioMart and WhatsApp together to get better connectivity with businesses, shop, and ultimately purchase products in a seamless mobile experience.
The transaction also comes at a time when some analysts are worried about selling a stake to Aramco for $75 billion with the fall in oil prices posing a growing risk to RIL's contract.
This deal was a key element of RIL's reported the goal of becoming a net debt-free firm by March 2021.
After seeing a decline in Facebook's user base, the social media giant soon started acquiring other social media platforms like Instagram(for 1billion USD in 2012), WhatsApp (for 19billion USD in 2014) to maintain the user base. As Jio Platforms is the parent of various digital app platforms such as JioMart, Jio-Saavn, and JioCinema. Now, Facebook can get a seat on the board of Jio Platforms.
According to ET as reported on April 17, RIL and Facebook were looking at the possibility of developing a super-app like China's WeChat by leveraging the reach of Jio and the uniqueness of WhatsApp.
Let's Hope for the best!
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