Reliance Retail has raised Rs 7,500 Crore by selling 1.75% Stake to American private equity player Silver Lake. The investment was announced by Mukesh Ambani-led Reliance Retail Ventures Limited (RRVL).
The Silver Lake investment values RRVL at a pre-money equity value of Rs 4.21 lakh crore and this will translate into a 1.75% equity stake for Silver Lake in Reliance Retail on a fully diluted basis.
This marks the second investment by Silver Lake in a subsidiary of Reliance Industries. The world’s largest tech investor had earlier invested Rs 10,202 crore for a 2.08% stake in Reliance Jio Platforms in two investment rounds in May and June.
Significance
With the latest investment, Reliance Jio Platforms and Reliance Retail account for over Rs 9 Lakh crore of RIL valuation. RIL stated that the investment by Silver Lake is a strong endorsement of its tech and consumer business capabilities, disruptive business models and secular long-term growth potential.
RIL Chairman's Statement |
| RIL Chairman and MD Mukesh Ambani said that he is delighted to extend their relationship with Silver Lake to their 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. Ambani further stated that they believe technology will be key to bringing the much-needed transformation in the sector and Silver Lake will be an invaluable partner in implementing their vision for Indian Retail. |
Silver Lake Co-CEO statement |
| Silver Lake Co-CEO and Managing Partner Egon Durban commented on the deal by saying that they are pleased to deepen their relationship with Reliance with this investment. Durban stated that 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 and that the success of JioMart in such a short period, especially during COVID-19 pandemic, is truly unprecedented. He further stated that Reliance’s New Commerce strategy could become the disruptor of this decade and they are thrilled to have been invited to partner with Reliance in their mission for Indian Retail. |
How is RIL attracting global investors amid COVID pandemic?
As per market experts, RIL's deep understanding of the Indian markets along with rapid digitisation opportunity post-COVID-19 and the company’s capabilities to bring cutting-edge technologies and tools such as AI, AR/VR, blockchain and big data into play for all Indians are some of the key reasons that has made the conglomerate so attractive to global investors.
Reliance Retail in talks with various global investors
RIL Chairman Mukesh Ambani had announced during the company’s annual shareholder meeting in July 2020 that Reliance Retail was receiving strong interest from global strategic and financial investors and that it will induct them in the retail business in the upcoming quarters. Reliance Retail, which is India's largest and most profitable retail business, is looking to raise USD 5.7 billion by selling about 10% in new shares.
Background
Reliance Retail Ventures Limited (RRVL) had announced on August 29, 200 that it is acquiring the retail and wholesale business and the logistics and warehouse business of Kishore Biyani’s Future Group for Rs 24,713 crore. The deal cemented Reliance Retail as the top player in brick-and-mortar space after getting access to over 1,800 Future Group Retail stores in India including Big Bazaar and FBB.
Silver Lake also recently invested USD 500 million in Indian educational technology and online tutoring platform Byju’s. The American firm has a track record of investing in some of the world's largest and successful tech companies such as Twitter, Alibaba, Dell Technologies, Airbnb, ANT Financials, Alphabet’s Waymo and Verily among others.
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