Facebook Buys 9.99% Stake in Reliance Jio

Reliance Jio is the biggest telecom operator in India based on the number of subscribers. Reliance Jio is also the biggest telecom company in India based on revenues. Reliance Jio has active subscribers of about 370 million. India is also the largest market for Facebook and it has nearly 400 million active users.WhatsApp has active 400 million users in India which are also the most in the world. So this deal will be between two of the biggest business tycoons in the world.

 

Facebook will invest 43,574 crores in Reliance Jio for a 9.99% stake and thus Facebook becomes a minority shareholder in Reliance Jio. Facebook CEO Mark Zuckerberg is trying to expand its social media services like Whatsapp and Facebook over more people in India. He is trying to expand the lead between TikTok which has already accumulated 250 million users in India in two years. Facebook is trying to widen its messaging service Whatsapp with commerce and payments into it. Facebook is trying to rival the biggest payment gateways like GooglePay, Paytm, etc.

 

Reliance Jio had been planning to start an online grocery marketplace called Jiomart for a long time. In a video by Facebook CEO Mark Zuckerberg said “India is a special place for us. We are also committing to work together on some critical projects that will  open up new commercial opportunities for us.” So the main aim of this deal will be the combination of payment gateway Whatsapp and Jiomart. The companies that have to fear from this deal are Walmart’s Flipkart, Paytm, and Amazon. Reliance Industries Limited shares closed at 10.3% higher at Rs 1,363.35 on the Bombay Stock Exchange on Wednesday, increasing the value of shares more than 12% in a day. This deal will be a win-win scenario for both companies.

 

The main things planned in this deal are

 

  • Jio and Facebook are developing a new commerce strategy.
  • The partnership between Jio and Facebook will boost hyperlocal commerce.
  • Whatsapp pay will be integrated into Jiomart for digital transactions. Thus both companies will benefit from this deal.

 

On December 31, 2019, Reliance Industries Limited’s net debt was at Rs 1.53 lakh crore due to the declining oil prices. The deal with Facebook is not the biggest deal of Reliance Industries Limited. In 2011, the London Based petroleum company BP plc bought a 30% stake in oil and gas exploration locks operated by Reliance Industries for a whopping amount of 7.2 Billion dollars. But still, this deal with Facebook is a breather of fresh air for Reliance Industries Limited because this deal will help to reduce the net debt by somewhat.

 

This deal will be a market-changing scenario for many companies. Companies like Flipkart, Amazon, and Paytm, etc will be worried as the deal goes through. This deal will create a new rival company. This deal will also affect many small businesses in India like grocery stores. SocialPulsar Inc is the best digital marketing company in San Francisco that helps you

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