Facebook has bought 9.99 per cent stake in Mukesh Ambani's Reliance Jio for Rs 43,574 crore, making it the largest minority shareholder in Jio Platforms Limited. The investment values Jio Platforms Limited (JPL) at a record Rs 4.6 lakh crore. This will catapult JPL as the fifth largest firm, considering market capitalisation of listed companies in India, behind its parent Reliance Industries (RIL), TCS, HDFC Bank and Hindustan Unilever (HUL). While the first two are far ahead, the other two are close with around Rs 5 lakh crore m-cap.
The American social media giant Facebook Inc will soon sign the binding agreement, which will be the largest foreign direct investment (FDI) in the country for a minority stake. The telecom arm Reliance Jio has grown as one of the largest telecom networks with a subscriber base of 370 million in a short span of three years. In its amazing journey, it disrupted the entire telecom business in the country and many telecom companies either stopped the service or merged with others or filed for bankruptcy.
It posted standalone revenue from operations, including access revenues, of Rs 13,968 crore in the third quarter, up 28 per cent compared to the same period last year. The EBITDA stood Rs 5,601 crore, up 38 per cent, and EBITDA margin of 40.1 per cent. The net profit of Rs 1,350 crore is 62.5 per cent higher. The ARPU during the quarter of Rs 128.4 per subscriber per month, better than that of rivals. The total wireless data traffic during the quarter of 1,208 crore GB went up 40 per cent.
JPL was created as a subsidiary of RIL in October last year to bring together all digital and mobility businesses under one roof. The new entity has become the parent of Reliance Jio Infocomm and applications like MyJio, JioTV, JioCinema, JioNews and JioSaavn, besides content-generation ventures. Thus, the operating company Reliance Jio became a step-down subsidiary of RIL.
For making JPL debt-free, the parent company has infused Rs 1.08 lakh crore in it. They want to build JPL like Alibaba and Google, which claim high valuations in the stock markets. The Facebook deal emphasises that JPL will expand as a digital giant for India. RIL has been using the cash flow from its flagship petroleum refining business to build the telecom and retail subsidiaries all these years. The Indian conglomerate has spent about Rs 4 lakh crore to build Reliance Jio.