Facebook likely to acquire 10% stake in Reliance Jio
After Meesho and Unacademy, Facebook is looking to invest in Reliance Jio to make another big move in the Indian market. A new report from the Financial Times has revealed that the social network has been in talks with the Mukesh Ambani-led telco to take a significant 10% stake in the company. Here's all you need to know about it.
According to the FT report, Facebook was close to signing a 'multi-billion dollar' deal to acquire 10% in Jio. The talks had been going on for a while but have now come to a halt due to the travel restrictions imposed in the light of the COVID-19 pandemic. Notably, apart from Facebook, Jio has also been exploring a potential investment from Google.
"Given the reach and scale of our digital ecosystem, we've received strong interest from potential strategic partners," Mukesh Ambani, Chairman, RIL had told shareholders in October 2019. "We will induct the right partners in our platform company, creating and unlocking meaningful value for RIL shareholders."
Back in November, the valuation of Reliance Jio was estimated to be around $60-65 billion. Now, going by this, if Facebook chooses to buy 10% stake in the company, it could be looking at a payout of $6-6.5 billion. However, there is no doubt that this would give the social network an unprecedented opportunity to expand its digital footprint in India.
Since its launch, Jio has grown to become India's third-largest telco with over 370 million subscribers. Beyond that, the company has also barged into the fiber internet and e-commerce category in the country. So, in case Facebook signs a deal to invest in Jio, it will be able to tap into a subscriber base larger than the population of the US.
Back in 2013, Facebook had tried to enter the Indian market with free internet services under the 'Free Basics' plan in partnership with the telco owned by Mukesh's younger brother Anil Ambani. However, the deal was countered by the Indian government after people in favor of net neutrality raised major alarms. Since then, the company has just invested in some Indian start-ups.