Reliance Jio reportedly held talks with Facebook to sell minority stake
The timing may not be right, but it could be one of the most important deals in the Indian internet ecosystem.
Social media giant Facebook has reportedly held talks with Mukesh Ambani's Reliance Jio to pick up a 10 percent stake in the company. If and when the deal goes through, it would be Jio's first equity dilution for a strategic investor.
This comes six months after Jio's parent company Reliance Industries rejigged its group structure to make the telecom entity net debt-free.
Reliance officials, however, are tight-lipped about the impending deal, given the company's recent focus on healthcare initiatives in the wake of the COVID-19 crisis.
YourStory's questions sent to an RIL spokesperson went unanswered.
But a report in the Financial Times indicates that the deal was on the verge of a closure by the end of this financial year (FY21).
However, negotiations may have been temporarily stalled in the wake of the coronavirus pandemic that has led to a 21-day nationwide lockdown in India.
Interestingly, this is not the first time that both the companies have engaged.
In July 2019, Facebook had partnered with Reliance Jio for a digital literacy drive called 'Digital Udaan'. It was targeted at tens of millions of JioPhone users in India, who were new to the internet.
The joint initiative reached 200 locations across 13 Indian states and introduced vernacular users to the joys of mobile connectivity.
Reliance Jio Director Akash Ambani had stated at the time,
"Jio is always looking to work with key global partners to enhance the digital life experience of the Indian consumer... eradicate barriers of information asymmetry and provide accessibility in real time."
Earlier in January 2020, Jio became India's largest telecom network, counting 370 million subscribers. It also posted a record 62.5 percent growth in profits.
Reliance Industries Chairman Mukesh Ambani described the network as "the driver of digital revolution" in the country. He said in a statement to the media,
"To drive the next leg of growth, a truly transformational and disruptive digital services company has been set up, which will bring together India’s No.1 connectivity platform, leading digital app ecosystem, and the world’s best tech capabilities for creating a truly Digital Society for each Indian.”
Earlier this month, Reliance Jio also sought government approvals for conducting 5G trials in India. If the trials are successful, it would bring down the operator's dependence on Samsung, which was its solitary supplier of 4G network solutions.
(Edited by Teja Lele Desai)