Reliance Industries Limited (RIL) shares jumped over 8 per cent on Wednesday after Facebook decided to pick up almost 10 per cent stake in its subsidiary Reliance Jio.
Shares of RIL started rising since early trade after the announcement and touched a high of 8.3 per cent. At around 11:45 am, shares of RIL were trading at Rs 1332.95 or 7.71 per cent higher.
Facebook will by 9.99 per cent stake in Jio, which is a wholly-owned subsidiary of Mukesh Ambani’s RIL. With the fresh deal, Facebook now becomes Reliance Jio’s largest minority shareholder.
A video statement released by Ambani said the deal between the two entities will help forward the “Digital India” initiative.
“The synergy between Jio and Facebook will help realize Digital India Mission with its two ambitious goals — Ease of Living and Ease of Doing Business for every single category of Indian people without exception,” said Ambani.
“In the post-Corona era, I am confident of India’s economic recovery and resurgence in the shortest period of time,” he added.
“The partnership will surely make an important contribution to this transformation.”
In a statement, Reliance said that the fresh investment of Rs 43,574 crore by Facebook values Jio Platforms at “Rs 4.62 lakh crore pre-money enterprise value assuming a conversion rate of Rs 70 to a US dollar”.
Sharing details about the deal, Facebook CEO Mark Zuckerberg said the investment aims at collaboration between the social media giant and Jio on major projects that would help create jobs in India.
“India has more than 60 million small businesses and millions of people rely on them for jobs. With communities around the world in lockdown, many of these entrepreneurs need digital tools they can rely on to find and communicate with customers and grow their businesses. This is something we can help with — and that’s why we’re partnering with Jio,” he said.
Commenting on the deal, Aamar Deo Singh, Head Advisory, Angel Broking Ltd, said, “ It’s a win-win situation for both the partners, as on one hand, it gives Facebook a wider audience with Jio’s 388 million clients, it helps Reliance pay its debt as well as leverage the reach of Whatsapp, Facebook Chat’s service.”
“And with the current global scenario post-COVID-19, focus being on digital, it opens up huge business opportunities for both of the giants. It couldn’t have come at a more opportune time,” he added.
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