Reliance Retail Raises INR 7,500 Cr From Silver Lake For New Commerce Play

Private equity giant Silver Lake Partners is planning to invest INR 7,500 Cr in the retail unit of India’s Reliance Industries Ltd (RIL) in exchange for a 1.75% stake.

The investment values Reliance Retail at a pre-money equity value of INR 4.21 lakh Cr, RIL said in a release on Wednesday (September 9).

This marks the second billion-dollar investment by Silver Lake in a Reliance Industries subsidiary after the $1.35 Bn investment in Jio Platforms announced earlier this year.

Reliance Retail Limited, a subsidiary of RRVL, operates India’s largest and fastest growing retail business serving close to 640 million footfalls across its nearly 12,000 stores nationwide. Founded in 2006, the company said that it would buy the retail and logistics businesses of Kishore Biyani’s Future Group in a deal valued at $3.38 Bn, including debt.

Reliance Retail through its new commerce strategy has started a digitalisation of small and unorganised merchants and plans to expand the network to over 2 Crore of these merchants, helping them benefit from the use of technology tools and efficient supply chain infrastructure.

RIL, controlled by India’s richest man, Mukesh Ambani, has recently raised more than $20 Bn from global investors including Facebook Inc by selling stakes in its Jio Platforms, its digital business. Silver Lake was the first US private equity firm to invest in Jio after the Facebook deal, pumping more than INR 10,200 Cr.

With the latest investment, Jio Platforms and Reliance Retail account for over INR 9 lakh Cr of RIL valuation.

Silver Lake has invested in companies such as Twitter, Airbnb, Alibaba, Dell Technologies, ANT Financials, Twitter, Alphabet’s Waymo and Verily, among others.

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.”

Egon Durban, Co-CEO and managing partner of Silver Lake, said, “We are pleased to deepen our relationship with Reliance with this investment. 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.”