After acquiring a piece of Jio Platforms, the world’s largest tech investor, Silver Lake Partners, will invest Rs 7500 crore in the retail arm of Reliance Industries Ltd. The investment will give Silver Lake a 1.75 per cent stake on a fully diluted basis in Reliance Retail, which had a few days ago inked a deal to acquire rival Future Retail.
The investment values Reliance Retail at Rs 4.21 lakh crore or about 57 billion US dollars. This marks the second large investment by Silver Lake in a Reliance Industries subsidiary. The US fund had pumped in Rs 10,203 crore for a stake of just over 2 per cent in Jio, the digital services arm of RIL, in two investment rounds in May and June. With this, Jio Platforms and Reliance Retail account for over Rs 9 Lakh crore of RIL valuation.
Commenting on the deal, 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,” he added.
SLP has a track record of investing in some of the largest and successful tech companies globally such as Twitter, Airbnb, Alibaba, Dell Technologies, ANT Financials, Twitter, Alphabet’s Waymo and Verily amongst others.
RIL said the investment by Silver Lake is another strong endorsement of its tech and consumer business capabilities, disruptive business models and secular long-term growth potential.
The deal, industry watchers said, was a voted of confidence in Reliance Retail's ability to lead a disruptive, technology led transformation of Indian retail sector particularly relevant in the post-pandemic India.
Reliance’s deep understanding of the Indian markets, the rapid digitisation opportunity post-Covid-19 and the company’s capabilities to bring cutting-edge technologies and tools such as AI, Blockchain, AR/VR, Big data into play for all Indians are some of the reasons that has made the conglomerate so attractive to global investors.
RIL chairman Mukesh Ambani, during the company’s annual shareholder meeting in July, had said that it has received “strong interest” from strategic and financial investors in Reliance Retail, and that it will induct them in the retail business in the next few quarters. "Reliance Retail is India’s largest and most profitable retail business," he had added.
Last month, Reliance Retail had announced that it is acquiring the retail and wholesale business and the logistics and warehousing business from the Future Group for Rs 24,713 crore. The deal had cemented Reliance Retail as the top player in brick-and-mortar space after getting access to over 1,800 Future Retail stores in India.
As part of the deal, fashion and grocery retail formats from Future Group’s listed entities such as Big Bazaar, FoodHall, Nilgiris, FBB, Central, Heritage Foods and Brand Factory, barring apparel brands Lee Cooper and All, was acquired by RIL.
Reliance, an oil-to-telecoms conglomerate controlled by India's richest man, Mukesh Ambani, has expanded rapidly to woo potential investors and is pitching its retail business as a formidable force in the world's second most populous country.
Silver Lake shot into prominence after acquiring PC maker Dell Inc along with Michael Dell in 2013. It is a global leader in technology investing, with over $43 billion in combined assets under management and committed capital and a team of approximately 100 investment and operating professionals located around the world in Silicon Valley, New York, Hong Kong and London.