Social media giant Facebook announced an investment of $5.7 billion (Rs 43,574 crore) to buy a 9.99 per cent stake in Reliance Industries’ telecom arm Jio, the valuation of Jio will be Rs 4.62 lakh crore as calculated Rs 70 against the dollar.
It is the largest FDI in the Indian technology sector. Facebook will become the largest minority shareholder in Jio after regulatory approval. It looks to expand presence in its largest market in terms of subscriber base.
Facebook plans to use Jio’s small business platform for WhatsApp as users will be able to make transactions directly from the messaging service.
WhatsApp has over 400 million users in India, making it the largest market for the messaging app. Facebook bought WhatsApp for around $19 billion a few years ago and was searching for more ways to monetize the messaging service.
“India is home to the largest communities on Facebook and WhatsApp, and a lot of talented entrepreneurs. The country 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,” said Facebook CEO Mark Zuckerberg in a Facebook post.
Both companies will continue to work as independent entities. The two sides will work together where they see benefits and at the same time they will remain each other’s competitors, Said Anshuman Thakur, head of the strategy at Reliance Jio Infocomm.