Silver Lake may invest $1 billion in Reliance Retail, says report reliance jio stores

Looks like India’s richest man Mukesh Ambani’s Reliance Industries and the various companies in its ambit cannot be kept out of news this season. Just as there is a long-shot speculation that Walmart may pick up a stake in Reliance Retail, comes the news that the latter is in negotiation with the American private equity investor Silver Lake.

It is said Reliance Retail is likely to to sell 1.7-1.8% stake for $1 billion (about Rs 7,500 crore).  

The news, broken by the Financial Times, says if this deal materialises, it potentially values Reliance Retail at over Rs 4.3 lakh crore.

Reliance Retail, the report claims, is aiming to raise $5.7 billion by selling about 10 per cent in new shares.

Reliance Retail under the spotlight

Reliance Retail is India’s largest and most profitable retailer with nearly 12,000 outlets. In 2019-20, Reliance Retail revenue was Rs 1,62,936 crore. 

Reliance Industries’ digital subsidiary Jio Platforms has also unveiled recently JioMart, the digital platform that will connect neighbourhood grocery shops with consumers. It will leverage into Reliance Retail’s infrastructure and ecosytem.

Reliance Retail stores span over 7,000 towns with 28.7 million sq ft of retail space.

Just last week, Reliance Retail gobbled up Kishore Biyani’s Future Group.

Silver Lake is the global leader in large-scale technology investing. Its investments have included Airbnb, Alibaba, Alphabet’s Verily and Waymo units, Dell Technologies, Twitter and numerous other global technology leaders.

Silver Lake had earlier this year invested, in two deals, $1.35 billion in Jio Platforms.

Emulating Jio Platforms?

This is likely the first such deal by Reliance Retail to raise funds. There may be a few other investors in the pipeline.

It may be recalled that addressing shareholders at Reliance Industries’ 43rd annual general meeting recently, Mukesh Ambani had said “Reliance Retail has received strong interest from strategic and financial investors.”

He also made it clear the company will induct global partners and investors for the retail business in the next few quarters.

Looks like his strategy for Reliance Retail is similar to the one he unleashed for Jio Platforms in tapping huge investments from big names. 

Jio Platforms had raised $20 billion of investment for the digital business  from 13 global investors including Facebook, Google and Intel. 

It is said investors in Jio Platforms will be given the opportunity to invest in Reliance Retail, too.

Via: Financial Times

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