Facebook will buy a 10% stake in the digital business of India’s Reliance Industries for $5.7 billion, as the social media firm looks to leverage its highly popular WhatsApp chat service to offer digital payment services.

Facebook's investment will make it the largest minority shareholder in Jio Platforms Ltd, Jio said  in a statement, putting the enterprise value of the business at around $66 billion. Jio Platforms holds a host of Reliance's digital assets including Jio Infocomm.

WhatsApp is trying to secure approval to roll out its digital payment service in India, which will see it compete in a crowded market with the likes of Google Pay and Paytm. The approval to expand beyond the beta launch hasn’t come through yet, a Facebook spokesman said.

India is in the middle of major digital transformation and Facebook is committed to "opening commerce opportunities for people across the country", founder Mark Zuckerberg said in a post , a day after the social media giant invested $5.7 billion in Reliance Industries Ltd-owned mobile telecom company Reliance Jio.

In a statement announcing the investment Facebook Inc. said it would focus on collaborations between its messaging platform WhatsApp and Reliance Industries Limited's e-commerce venture JioMart.

"Facebook is teaming up with Jio Platforms - we're making a financial investment, and more than that, we're committing to work together on some major projects that will open up commerce opportunities for people across India," Mr Zuckerberg wrote on his Facebook page.

The deal, which makes Facebook the largest minority shareholder in Jio, comes after the government approved WhatsApp's digital payment service, which will compete with the likes of Google Pay and Paytm.

In his post Mr Zuckerberg pointed out that small businesses - India has over 60 million of these - were the core of every economy and millions relied on them for employment.

"With communities around the world in lockdown, many of these entrepreneurs need digital tools they can rely on to find and communicate with customers and grow their businesses. This is something we can help with -- and that's why we're partnering with Jio to help people and businesses in India create new opportunities," he said.

Jio said Morgan Stanley was the financial adviser on the deal. AZB & Partners, and Davis Polk & Wardwell were counsels.

Source- Reuters