By Arré Bench Apr. 22, 2020
Mukesh Ambani has attracted a ₹43,574-crore investment from Mark Zuckerberg. The deal with Facebook will empower Jio Mart, Jio’s new commerce platform, to connect with over 3 crore kirana stores with the help of WhatsApp.
How to make the most out of working from home? Ask India’s richest man Mukesh Ambani. Even as India continues to be under lockdown and businesses have their wings clipped, Ambani attracted a ₹43,574-crore investment from Mark Zuckerberg. Facebook’s 9.99 per cent stake in Reliance Jio is the largest foreign direct investment in India’s tech sector.
— Economic Times (@EconomicTimes) April 22, 2020
The deal with Facebook will empower Jio Mart, Jio’s new commerce platform, to connect with over 3 crore kirana stores with the help of WhatsApp, Facebook’s messaging platform. Mukesh Ambani issued a video statement saying JioMart and WhatsApp will help small Indian kirana shops to digitally transcat with customers in their neighbourhood, facilitating fast delivery of day-to-day items. He ended the address wishing everyone good health, and stating that “Corona harega, India jeetega.”
"#Coronavirus haarega, India jeetega," says Ambani, emphasising on his and Mark Zuckerberg's commitment towards Digital India@facebook buys stake in @reliancejio for Rs 43,574 cr: https://t.co/GcxJhFY3aU pic.twitter.com/EbHTFXeAV8
— moneycontrol (@moneycontrolcom) April 22, 2020
In a statement, Reliance Jio said, “The investment values Jio Platforms amongst the top five listed companies in India by market capitalisation, within just three and a half years of launch of commercial services. This partnership will accelerate India’s all round development, fulfilling the needs of the Indian people and the Indian economy.”
— Reliance Jio (@reliancejio) April 22, 2020
Zuckerberg emphasised on the need to go digital. “With communities around the world in lockdown, entrepreneurs need digital tools to find and communicate with customers. This is something we can help with – and that’s why we’re partnering with Jio,” he said in a video statement.
#FacebookJioDeal – Facebook is joining forces with a new partner in India. We are making a major financial investment to become the largest minority shareholder in Jio platforms: CEO & Founder, Facebook Mark Zuckerberg.
— CNNNews18 (@CNNnews18) April 22, 2020
Analysts say that the Facebook-Reliance deal lends confidence to India’s telecom sector and paves the way for RIL to become a net debt-free company by 2021. “As of December 31, 2019, the net debt for the group stood at ₹1,531 billion and with Facebook’s investment, this should put RIL on course to be net debt free by March 2021,” analysts at Credit Suisse said in a note.
Facebook-Reliance deal lends confidence in the Indian telecom sector and paves the way for RIL to become a net debt-free company by 2021, analysts say#telecom #Facebook #Reliance@IamPuneetW writeshttps://t.co/TcBGtA45pr
— Business Standard (@bsindia) April 22, 2020
The deal comes at a time when Facebook has been under scrutiny worldwide for not protecting user privacy and there are concerns around WhatsApp facilitating the spread of fake news. On the other hand, Mukesh Ambani is looking to reduce debt with the petroleum business facing uncertainty due to crashing oil prices. After the failure of “Free Basics” in India on net neutrality grounds, Mark needs to find his mojo back in the Indian market and who better to help him navigate it than Mukesh Ambani? And for Ambani, this funding will help Jio invest in technology at a time when rival operators are struggling to survive.
— Business Line (@businessline) April 22, 2020
Conversations around data privacy, net neutrality, and fairplay are once again set to take centrestage after Facebook and Jio try to converge synergies around WhatsApp, e-commerce, and payments. Tech journalists have advised a word of caution, suggesting we must all be watchful.
What could this mean for #Facebook + #Jio. Loads of synergies. FB failed with free basics in India now they have the biggest telco on their side. Jio pay is an outlier for whatsapp as they’ve struggled with launching payments. Same holds for Jio Chat. Bad news for privacy though
— Sahil Bones Gupta #stayhome (@DigitallyBones) April 22, 2020
4. Jio is much more powerful than in 2015. FB remains same. The government isn't as open to public opinion on issues like privacy, encryption etc anymore. Civil society is much weaker than in 2015.
We will have to be watchful.
— Nikhil Pahwa (@nixxin) April 22, 2020
Reliance’s stock price saw a surge of around eight per cent after the announcement, hitting a six-week high.