[12:01 PM, 4/25/2020] Venkat Reddi - Mgr IDBI Demat: Why is Facebook planning to buy a 10% stake in

Reliance Jio?

On 22 April 2020, Facebook and Reliance Industries Ltd. (RIL) announced that Facebook will be investing
INR 43,574 Crores (Approx. USD 5.7 Billion) into Jio Platforms in exchange for a 9.99% ownership which
values Jio Platforms at USD 65.95 Billion, making it the most valued privately held subsidiary of RIL.

This deal has been under process for quite some time now and there were many speculations in news in
recent times. This deal serves as a stepping stone for the next big Digital Revolution in India and will be
empowering all the 1.3 Billion Indians, particularly for the Micro, Small and Medium Enterprises
(MSMEs), small retailers/merchants and farmers.

Now two questions arise.

1. Why does this investment makes Financial sense for Facebook and RIL.

2. What is the strategic purpose of Facebook and Jio that they want to achieve with this partnership?

To answer the first question-

This deal serves not just the financial purposes, but also is the base for a much larger strategic
partnership that Jio and Facebook will be achieving.

RIL Chairman and MD, Mr. Mukesh Ambani has announced in RIL’s 42nd AGM in 2019 that, “Reliances
hopes to become a zero net debt company in the next 18 months, i.e. by 31st March 2021”. With the
Saudi Aramco deal getting delayed due to multiple reasons including COVID-19 and crude oil futures
crash, the Facebook deals comes right in time to help RIL achieve its goal.

For Facebook, even though the revenue per user is low in India, still it contributes as one of its biggest
market and with an untapped potential of bringing millions of rural Indians on internet.

Second Question, the strategic partnership purpose of this deal-

Facebook has been trying to tap the rural India population from quite some time now, and it seems lost
with the success of TikTok particularly in the rural and low-income segment areas. With the 388+ Million
users of Jio, Facebook can easily tap this segment and has already planned to launch Lasso, its own
short-form video app which will be in direct competition with TikTok.

But this is just one small part of the strategic move. The bigger picture is of bringing India online through
the 388+ Million users of Jio, 300+ Million active users of Facebook and WhatsApp in India (with an aim
of bringing 1 Billion Indians on these platforms).

The combined partnership will focus on empowering the 60 Million MSMEs, 120 Million Farmers and 30
Million retailers/merchants. This partnership is a major push for JioMart e-commerce platform (which is
a fully owned subsidiary of Reliance Retail) along with currency transactions through WhatsApp and
JioMoney. The aim is to make India shop online with their nearby retailers and enabling them to pay
online. Therefore, giving seamless shopping and transactions experience to the customers and opening
bigger opportunities for the Indian retail industry which is currently highly fragmented and unorganised
but worth USD 600 Billion today.

So, the opportunity for both Jio and Facebook is immense in India.

This partnership also help realise the Digital India missions of uplifting Ease of Living and Ease of Doing
Business in India.

The deal is the largest FDI (Foreign Direct Investment) for minority stake by a tech company in India. It is
also one of the largest investments ever made by Facebook.

This partnership also reinforces the position of India as an important market for all the large
corporations around the world. It also cements RIL’s capability in incubating and building disruptive
next-generation businesses, while delivering market defining shareholder value.

[7:15 PM, 4/25/2020] Venkat Reddi - Mgr IDBI Demat: BFSI Sector Update~ Anand Rathi (24 April 2020)

❇ APE -HDFC Life gains market share in Private Space; SBI Life, I-Pru lose ; Max takes third position –In
APE, HDFC Life was numero uno (gaining ~110bps m/m). SBI Life continued to lose market share (decline
in market share over the last three months) but managed to retain its second position. I-Pru, now
fourth, lost market share (~650bps m/m). Max took third position, gaining ~200bps m/m. Other major
private operators which gained market share are Kotak Mahindra Life (~180bps m/m) and Aditya Birla
Sunlife (~130bps m/m).