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Facebook-Reliance Jio Deal: Know why Mark Zuckerberg bought stake in Ambani's Jio|Explained

Facebook-Jio deal comes amid the outbreak of Coronavirus (COVID-19) that has impacted the economy worldwide. The partnership will help revive the Indian Economy and overcome the disruptions caused by the deadly virus.

Apr 22, 2020 15:31 IST
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Reliance Industries shares soared over 8 percent on April 2, 2020 to Rs 1339 post the announcement of Facebook acquiring 9.9 percent stake in Mukesh Ambani's Reliance Jio for USD 5.7 billion or Rs 43574 crore. As per the social media giant founder Mark Zuckerberg, this fully diluted mega deal with the telecom subsidiary of Reliance Industries will give Facebook a foothold in Indian market.

Chairman Mukesh Ambani commented on the deal stating that the partnership between Jio-WhatsApp will help revive the Indian economy in the post-Corona era.

Facebook-Jio partnership amid COVID-19 crises

Facebook-Jio deal comes amid the outbreak of Coronavirus (COVID-19) that has impacted the economy worldwide. The partnership will help revive the Indian Economy and overcome the disruptions caused by the deadly virus.

Why Facebook invested in Jio? How the deal would benefit Facebook?

Facebook becomes largest minority shareholder in Jio: With this deal, the Facebook becomes the largest minority shareholder in Jio.

Access to wider audience: Launched in 2016, Jio is currently valued at USD 65.95 billion and makes Reliance Industries (RIL) one among the top five listed companies by market capitalisation in India. The platform today offers telecom, digital services and connectivity platform to over 38.8 crore subscribers in India. Facebook aims to deepen its presence through the Jio subscribers base.

Seamless Connectivity & E-commerce: This deal would enable collaboration between Whatsapp & JioMart, the e-commerce venture of Reliance Industries Limited. It will help enhance the Seamless Connectivity & E-commerce. It will help people connect with businesses, online sellers and transact online with seamless internet connectivity.

Support Small Businesses: The Facebook-Jio deal will help grow the small businesses on WhatsApp, the subsidiary of Facebook. It will boost e-commerce through an enriched digital ecosystem and would empower over 60 million micro, small and medium (MSME) businesses in India, 30 million small merchants and 120 million farmers and millions of medium and small enterprises through the digital services.

Enhance Facebook's presence in Indian Market: With its WhatsApp, Instagram, and Facebook platforms, the Facebook has already established its presence in the Indian Market. The deal will also strengthen its presence in India.

Help Facebook compete with online payment platforms: The deal comes following the approval of WhatsApp's digital payment service by Indian Government. It will help Facebook compete with digital payment platforms like Google Pay and Paytm in India.

How Facebook- Jio Deal will benefit Reliance Industries?

Lessening the Debt Burden: The deal will help the Reliance Industries in cutting its debt significantly. As of September 2019, the RIL debt was pegged at USD 40 billion.

Boost Ease of Living & Ease of Doing Business: The Partnership between Facebook's Whatsapp and Jio will help achieve PM Modi's Digital India Initiative and its two goals ‘Ease of Doing Business’ and ‘Ease of Living’. The Jio platform was launched with an aim of enhancing the quality of life and transform India into the leading digital society.

Boost Reliance's Commerce Business: This commercial partnership will accelerate the commerce business of Reliance on the Jio Mart.

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