Mukesh Ambani-led Reliance Retail Ventures Limited (RRVL) has announced an investment of Rs 7,500 crore from American private equity player Silver Lake. This investment values RRVL at a pre-money equity value of Rs 4.21 lakh crore and will translate into a 1.75% equity stake for Silver Lake in RRVL on a fully diluted basis.
This is the second investment by Silver Lake in a Reliance Industries subsidiary after it invested Rs 10,202 crore for a 2.08% stake in Jio Platforms announced earlier this year.
Reliance Retail has been in talks with various global investors to raise funds. Mukesh Ambani said at Reliance Industries annual general meeting this year that Reliance Retail was receiving strong investor interest from global players. As per reports, Reliance Retail is looking to raise $5.7 billion by selling about 10% in new shares.
According to Reliance, the retail business has around 12,000 stores across the country and sees about 640 million footfalls.
It also recently acquired Kishore Biyani’s Future Group’s retail business, which includes its flagship hypermarket format BigBazaar, FBB, FoodHall, among others, adding over 2000 stores to its retail footprint.
Reliance Retail, through its New Commerce strategy, is looking to digitize small and unorganised merchants and wants to expand to over 20 million of these merchants.
Commenting on the transaction with Silver Lake, Mukesh Ambani, Chairman and Managing Director, Reliance Industries, 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. We believe technology will be key to bringing the much-needed transformation in this sector so that various constituents of the retail ecosystem can collaborate to build inclusive growth platforms. Silver Lake will be an invaluable partner in implementing our vision for Indian Retail.”
The transaction is subject to regulatory and other customary approvals.
The announcement also comes a day after Silver Lake invested $500 million in Edutech platform Byju’s.
Commenting on the investment, Egon Durban, Co-CEO and Managing Partner of Silver Lake, said, “We are pleased to deepen our relationship with Reliance with this investment. Mukesh Ambani and his team at Reliance have created an outstanding world leader in retail and technology through their courageous vision, commitment to societal benefits, innovation excellence and relentless execution. The success of JioMart in such a short time span, especially while India, along with the rest of the world, battles the COVID-19 pandemic, is truly unprecedented, and the most exciting growth phase has just begun. Reliance’s New Commerce strategy could become the disruptor of this decade. We are thrilled to have been invited to partner with Reliance in their mission for Indian Retail.”
As per reports, Reliance is also in early stage talks with Facebook and private equity fund KKR for an investment in Reliance Retail. Both Facebook and KKR have invested in Jio Platforms as well, taking about 30% stake combined.