India’s oil-to-telecom conglomerate Reliance Industries, run by India’s richest man Mukesh Ambani, continues to attract global investors amid the Covid-19 pandemic as it looks to pare its debt.
After big names such as Facebook and Google signed checks for Reliance’s digital arm Jio Platforms, it has now primed its retail arm Reliance Retail Ventures for the same.
In the latest round of funding, US-based private equity firm Silver Lake will invest 75 billion rupees (US$1.02 billion) in Reliance Retail. In a regulatory filing, Reliance said this investment would translate into a 1.75% stake in Reliance Retail which has a valuation of 4.21 trillion rupees ($57.38 billion).
Reliance Retail leads the brick-and-mortar retail sector with more than 12,000 stores and its acquisition last month of another retail major, Future Group, for 247 billion rupees ($3.37 billion), will take the tally to 13,500 stores.
In May, Reliance Industries launched JioMart, an online grocery service, in a move aimed at rivaling Amazon and Flipkart. It is looking to expand Jiomart’s portfolio beyond groceries including categories such as electronics, fashion, pharma and healthcare.
The company is also planning to deepen its ties with WhatsApp to boost the reach of JioMart.
As for the recent deal, Mukesh Ambani said: “I am delighted to extend our relationship with Silver Lake to our transformational efforts of building an inclusive partnership with millions of small merchants while providing value to Indian consumers across the country in the Indian retail sector.”
For Silver Lake, this deal marks its second investment above $1 billion in a Reliance group company. Earlier, along with co-investors, it put 102 billion rupees in two rounds in Jio Platforms.
Its latest investment in Reliance Retail is expected to set the stage for more stake sales by the retail behemoth. KKR, another private equity firm, is reportedly in talks to invest 110 billion rupees, the Business Standard reported.
Investors such as Abu Dhabi Investment Authority and Mubadala could be next in line, the daily added. However, a Reliance spokesperson declined to comment. Reliance Retail is reportedly aiming to offload a 25% to 30% stake.
Earlier Reliance offloaded an almost 33% stake in Jio Platforms to 14 investors for 1.52 trillion rupees between April and June.