After attracting an investment of US$20 billion for his digital venture Jio Platforms, Mukesh Ambani, India’s richest man, is now looking to repeat the feat for his retail arm.
The latest to sign a check is US private equity group KKR & Co, which will invest $754 million for a 1.28% stake in Reliance Retail Ventures Ltd, for a valuation of 4.2 trillion rupees ($57 billion). KKR invested $1.5 billion in Jio Platforms earlier this year, and it has invested about $5.1 billion in more than 15 companies in India.
The deal follows Silver Lake Partners’ $1 billion purchase earlier this month of a 1.75% stake in Reliance Retail. Silver Lake too had earlier paid $1.35 billion for a stake in Jio Platforms.
“I am pleased to welcome KKR as an investor in Reliance Retail Ventures as we continue our onward march. KKR has a proven track record of being a valuable partner to industry-leading franchises and has been committed to India for many years,” said Mukesh Ambani in a statement.
Reliance is looking to sell a stake of around 15% in its retail venture to a clutch of foreign investors and would also induct a strategic investor into the company as the conglomerate looks to pivot from its core business of oil and petrochemicals to a technology-retail behemoth. Media reports say that Saudi Arabia’s Public Investment Firm, Abu Dhabi-based Mubadala, Abu Dhabi Investment Authority, KKR and L Catterton are likely to pick stakes. The company plans to uses these investments to strengthen its dominance in the retail market and will compete with Amazon and Walmart-owned Flipkart.
Reliance Retail runs supermarkets, India’s largest consumer electronics chain store, a cash and carry wholesaler, fast-fashion outlets and JioMart, an online grocery store. The acquisition of Future Group’s retail business added about 1,700 large stores to RIL’s 11,806 stores in its retail segment and increased its organized retail revenue market share by around 5%. It has a presence in 7,000 towns.
Earlier, 13 investors had poured a total of around $20 billion into Jio Platforms, which also included India’s leading telecom operator, Reliance Jio. Besides Silver Lake and KKR, the other investors include Facebook, Google, private equity groups Vista and General Atlantic and Abu Dhabi’s sovereign wealth fund Mubadala. Asia Times