Facebook has bought a 9.9% stake in Reliance Jio for $5.7 billion (Rs 43,574 crore), the telecom unit of Reliance Industries Ltd (RIL) in a deal that gives the social media giant a firm foothold in a fast-growing massive market and helps the Indian oil-to-telecom conglomerate to significantly cut debt.

The deal values Jio at Rs 4.62 lakh crore ($65.95 billion).

Commenting on the deal, RIL said this is the largest investment for a minority stake by a technology company anywhere in the world and the largest FDI in the technology sector in India. The investment values Jio Platforms amongst the top 5 listed companies in India by market capitalization, within just three and a half years of launch of commercial services, it said in a statement.

Facebook said, "This investment underscores our commitment to India, and our excitement for the dramatic transformation that Jio has spurred in the country. In less than four years, Jio has brought more than 388 million people online, fueling the creation of innovative new enterprises and connecting people in new ways. We are committed to connecting more people in India together with Jio."

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The company further said, "Our goal is to enable new opportunities for businesses of all sizes, but especially for the more than 60 million small businesses across India."

Concurrent with the investment, Jio Platforms, Reliance Retail and Facebook's WhatsApp service have also entered into a commercial partnership agreement to further accelerate Reliance Retail’s new commerce business on the JioMart platform using WhatsApp and to support small businesses on WhatsApp, RIL said.

Since its launch three years ago, Jio, led by billionaire Mukesh Ambani, has grown at a sprinter’s pace to become India’s largest telecom company. It has accumulated some 340 million customers through a barrage of innovations, including offering cut-throat mobile internet prices and a diverse suite of products and including chat services, movies, games and music.

The deal will help reduce RIL’s debt burden, which bulged due to the breakneck expansion of Jio and other businesses. Ambani invested around $40 billion to launch Jio in 2016. RIL is also the largest retail player in India thanks to a series of aggressive expansionary moves into consumer-facing businesses such as e-commerce and grocery.

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The Facebook deal is now the centrepiece of the ambitions of India’s biggest private company to cut net debt to zero by March 2021.

RIL has in recent months accelerated efforts to reduce debt by attempting to sell stakes worth billions of dollars in some of its businesses. It is in talks with Saudi Aramco to sell 20 percent of its oil to chemicals business and Canadian private equity firm Brookfield Asset Management for a stake in its telecom tower business.

For Facebook, India has in recent years emerged as a critical market. The company has more users in India than any other country. Its WhatsApp chat service, which has attracted 340 million users and is about to launch a key payments service will take on incumbents Paytm, Google Pay, PhonePe and Amazon Pay.

Despite the rapid growth of its social network and WhatsApp, Facebook stumbled with its Free Basics plan to provide free internet services after a ban by Trai, the telecom regulator. It now has an established ally with an established rural network on its side that is present in sectors ranging from telecom to ecommerce to home internet. The deal will also help Facebook battle rapidly growing Chinese apps like Tiktok which have attracted India’s youth. Not to mention a mouth-watering four way tech tussle with Japan’s Softbank , US heavyweights Google & Amazon and China’s Alibaba.

Ambani, chairman and managing director, RIL, said, the partnership with Facebook will make an important contribution to India’s economic recovery and resurgence in the shortest period of time in the post-Corona era. “All of us at Reliance are humbled by the opportunity to welcome Facebook as our long-term partner in continuing to grow and transform the digital ecosystem of India for the benefit of all Indians,” he said.

A recent report by Cisco said India is poised to have more than 900 million internet users due to the increased penetration of affordable smartphones and cheaper internet plans. India will also have around 2.1 billion internet-connected devices by 2023, said the report.

Last year, Reliance said that it would turn Jio into a new digital services company by investing nearly $15 billion, potentially attracting investors in the run-up to an eventual listing. The Jio-Facebook comes after Microsoft signed a 10-year deal with Reliance in 2019 to power the Indian company’s data centers with its Azure cloud.

Facebook said, "One focus of our collaboration with Jio will be creating new ways for people and businesses to operate more effectively in the growing digital economy. For instance, by bringing together JioMart, Jio’s small business initiative, with the power of WhatsApp, we can enable people to connect with businesses, shop and ultimately purchase products in a seamless mobile experience."

For Reliance Industries, Morgan Stanley acted as the financial advisor and AZB&Partners and Davis Polk & Wardwell advised as counsels on the transaction. Law firm Shardul Amarchand Mangaldas and PwC advised Facebook. Bank of America acted as an exclusive financial advisor to Facebook.

Catch our entire coverage on the Facebook-Jio Deal here : Reliance Industries Ltd., which also owns Jio, is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.