Facebook will buy a 10 percent stake in the digital business of India’s Reliance Industries for Rs. 43,574 crores. Facebook the social media firm looks to leverage its highly popular WhatsApp chat service to offer digital payment services. This investment will make it the largest minority shareholder in Jio Platforms Ltd, Jio said in a statement on Wednesday. It put the enterprise value of the business at around $66 billion. Jio Platforms holds a host of Reliance’s digital assets including Jio Infocomm.
WhatsApp is trying to secure approval to roll out its digital payment service in India, which will see it to compete in a crowded market likes of Google Pay, Paytm,Phone Pay and otherrdigital payment interfaces. Facebook spokesman said that approval to expand beyond the beta launch hasn’t come through yet.
The whatsapp messaging service has 40 crore users in India. Whatsapp biggest market, reaching nearly 80 percent of smartphone users in the country. This deal will also help the social media giant leverage WhatsApp to partner with Reliance’s e-commerce marketplace JioMart, that connects small businesses to customers all over the world.
“(India) is in the middle of a major digital transformation and organizations like Jio have played a big part in getting hundreds of millions of Indian people and small businesses online,” Facebook founder CEO Mark Zuckerberg said in a post.
Reliance, whose debt pile expand to more than $40 billion as of September, the partnership will bring in much needed funds to make good on its promise to cut net debt to zero by March 2021.
Reliance Industries, controlled by billionaire Mukesh Ambani, is also set to sell a fifth of its oil and chemical refining business to Saudi Aramco for roughly $15 billion (roughly Rs. 1.15 lakh crores), and a stake in its telecom tower assets to Canadian private equity firm Brookfield Asset Management for over $3 billon (roughly Rs. 23,000 crores).
While Jio has become the country’s largest wireless operator within about three years of its launch. Mumbai-headquartered Reliance has also rapidly expanded its retail business, which now has over 10,000 stores selling groceries, consumer electronics and apparel and other essential thinds.
Revenue at these two businesses together jumped more than 25 percent in the December quarter.
Last month, as in talks for a 10 percent stake in Jio but the talks were halted due to global travel bans amid the Covid 19 outbreak.