Facebook's USD 5.7 billion investment in Reliance Jio in the midst of coronavirus pandemic is a reflection of the faith that foreign companies have in Indian economy's potential and future growth, a top US-based India-centric business advocacy group has said.
In an interview to PTI, US India Strategic and Partnership Forum (USISPF) president Mukesh Aghi said the COVID-19 crisis has offered India the best opportunity to attract foreign investment and replace China as the world's manufacturing hub.
"I strongly feel that once the COVID-19 crisis ends, India will have the best opportunity to attract hundreds of these (foreign) companies into the country," Aghi told PTI. It will not only create jobs but also bring in investments and keep the Indian economy's momentum going.
The multi-billion-dollar investment announced by Facebook in an Indian company in the middle of the coronavirus pandemic shows that India is still a very attractive market on the digital commerce side, he said.
In a massive development, Facebook on Wednesday announced an investment of USD 5.7 billion (Rs 43,574 crore) for acquiring a 9.99% minority stake in Jio Platforms Ltd as it looks to expand presence in its largest market in terms of subscriber base. Additionally, Reliance Industries Limited also issued a statement to the same effect. It also added that along with Facebook, it has also entered into a commercial partnership agreement with Whatsapp.
"Today, we are announcing a USD 5.7 billion, or Rs 43,574 crore, investment in Jio Platforms Limited, part of Reliance Industries Limited, making Facebook its largest minority shareholder," Facebook said in a statement.
Releasing its statement, the Reliance Industries Limited said that it is signing 'binding agreements for an investment of Rs 43,574 crore by Facebook into Jio Platforms. This investment by Facebook values Jio Platforms at Rs 4.62 lakh crore pre-money enterprise value. Facebook's investment will translate into a 9.99% equity stake in Jio Platforms on a fully diluted basis."
Calling the partnership 'unprecedented', the Reliance industries in its statement added that it is the largest FDI in the technology sector. It said that the goal of the investment is to enable new opportunities for businesses and create new and exciting digital ecosystems to empower 1.3 billion Indians. It also said that the partnership assumes special significance amid disruption caused by coronavirus outbreak, adding that 'comprehensive digitalisation' will be a 'necessity for the revitalisation of the Indian economy.'
(with PTI inputs)