News Roundup: Reliance Completes INR 47K Cr Fundraise For Retail, Inches Closer To Acquiring Future Retail & More

This week, Reliance Industries announced the completion of its fundraise worth INR 47,265 Cr for Reliance Retail Ventures Limited (RRVL). 

Reliance Retail is India’s largest retail chain, both by revenue and the total number of stores. It operates in nearly 12,000 stores across 6,600 towns and cities, covering an area of 28.7 Mn square feet. 

The recent fundraise for Reliance Retail, the largest for it ever, saw the company raise funds from leading global investors including Silver Lake, KKR, General Atlantic, Mubadala, GIC, TPG Capital and Abu Dhabi Investment Authority (ADIA). 

Just as the Mukesh Ambani-owned company has filled its war chest for winning India’s retail war, it may have also gotten a step closer to its planned acquisition of India’s second-largest retail chain, Future Retail. This week, India’s antitrust watchdog, the Competition Commission of India (CCI), has approved the INR 24,713 Cr deal between Reliance Retail and Future Retail. Reliance Retail will acquire Kishore Biyani-owned Future Group’s retail, wholesale, logistics and warehousing businesses. 

There is still a case to be won though. On Friday, the Delhi high court reserved its order on Future Retail’s suit related to its deal with Reliance Retail. Last month, the deal between Reliance and Future was stalled by the Singapore International Arbitration Centre (SIAC), after Amazon had initiated proceedings. 

After the completion of all parties’ arguments on the matter on Friday, the Delhi HC asked them to submit their written submissions to the court by Monday. A court reserving its order means that the matter has been kept in abeyance for a while. 

Senior advocate Harish Salve, appearing for Future Retail, kept up the practice of comparing US-based retail giant Amazon to the East India Company. 

Salve’s arguments to the court seemed to be focused on the fact that Amazon has a 49% stake in Future Coupons, the promoter-entity of Future Retail. And while Amazon also has a 3.58% stake in Future Retail, it is not a controlling stake. 

“Amazon has an agreement with FCPL. Then he says controllers are common. The obligation of the promoter to Amazon cannot be attributed to the company. I am not bound by the commitment made by the promoter to the third party,” Salve said in court on Friday. 

“So Biyani must jump when we ask him to but we have no control.. that is what was argued. This native has to act as per the East India Company,” Salve quipped while referring to Future Group founder and CEO Kishore Biyani and equating Amazon to the East India Company.

On the other hand, senior advocate Gopal Subramanium appearing for Amazon, claimed that the award of the Singapore-based emergency arbitrator was valid since both parties (Amazon and Future) had chosen SIAC rules for arbitration and engagement.

“If parties agree to SIAC rules, the implication is that they agree to the entire gamut of the rules,” said Subramanium. 

“The SIAC rules themselves contemplate an Emergency Arbitrator. That contemplation in the rules by virtue of one provision in our law becomes a sacred agreement between the parties.

Other News 

1. Telecom operator Bharti Airtel has added about 1 Mn more customers than Reliance Jio in August 2020. Sunil Bharti Mitta-led Bharti Airtel added about 2.9 Mn users, whereas Mukesh Ambani-led Reliance Jio added 1.8 Mn users.
2. Bengaluru-based mobile esports platform Mobile Premier League (MPL), on Tuesday (November 17), announced INR 37 Cr ($5 Mn) fund for Indian game developers and studios to develop their games for a national and international audience. The fund will be open to all developers and studios.
3. An internal working group (IWG) constituted by the Reserve Bank of India (RBI), on Friday, recommended that non-banking financial companies (NBFCs) with an asset size of INR 50,000 Cr and above, may be considered for conversion into banks, subject to 10 years of completion of operations. 
4. The Indian government is reportedly considering barring private telecom players from sourcing critical equipment from Chinese manufacturers. The move could effectively spoil Chinese telcos Huawei and ZTE’s ambitions of taking part in India’s trials for fifth-generation mobile networks or 5G. 
5. After touching a record high of 2.07 Bn transactions in October, the National Payments Corporation of India (NPCI)-owned Unified Payments Interface (UPI) network is expected to continue its strong growth momentum, as it has already recorded 1.12 Bn transactions in the first 15 days of November. 

Among the movers and shakers this week, Mamaearth has appointed former chief product officer at PolicyBazaar, Jayant Chauhan as the chief technology and product officer. 

From the funding and acquisitions corner, around $183 Mn was invested across 16 Indian startups this week, and five companies were acquired.

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