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Yet another cheque for Reliance Retail: This time from General Atlantic for Rs 3675 cr

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The companies that invested in Reliance Industries’ digital subsidiary Jio Platforms in a big way are reposing faith in its retail arm, Reliance Retail, too. First it was Silver Lake. Then it was KKR

And now General Atlantic, which had invested Rs 6,598.38 crore in Jio Platforms, is shelling out Rs 3675 crore (around $498.2 million) at a pre-money equity value of Rs 4.285 lakh crore for a 0.84% equity stake in Reliance Retail. 

Reliance Retail operates India's largest and fastest growing retail business serving close to 640 million footfalls across its 12,000 stores nationwide.  

General Atlantic is a leading global growth equity firm with a 40-year track record of investing in the  Technology, Consumer, Financial Services and Healthcare sectors. General  Atlantic has investments in high-profile companies like Airbnb, Alibaba, Ant Financial, Box, ByteDance, Facebook, Slack, Snapchat, Uber and  other global technology leaders.

What they said about the deal

Mukesh Ambani, Chairman and Managing Director of Reliance Industries, in a media statement said, “Like Reliance Retail, General Atlantic  believes in the fundamental ability of digital enablement to drive progress, growth, and inclusion across  India and the world. We look forward to leveraging General Atlantic’s extensive expertise at the  intersection of technology and consumer businesses, and two decades of experience investing in India,  as we create a disruptive New Commerce platform to redefine retail in the country.”

Bill Ford, Chief Executive Officer of General Atlantic, said, “General Atlantic is thrilled to be  backing Mukesh’s New Commerce mission to drive substantial positive change in the country’s retail  sector, which goes hand-in-hand with his vision to enable a Digital India through the work of Jio  Platforms. General Atlantic shares Reliance Industries’ foundational belief in the power of technology  to foster transformative growth, and we are excited by the immense potential of the full Reliance  ecosystem.”

Isha Ambani, Director of Reliance Retail, said, “General Atlantic has tremendous knowledge in the retail space  developed by working with leading consumer and retail companies globally over the years and we  hope to benefit from that as we progress on our journey.” 

Sandeep Naik, Managing Director and Head of India & Southeast Asia at General Atlantic, said “Reliance Retail’s  strategy is unique – highly disruptive, and yet fully inclusive”.

Mubadla may be the next investor

Reliance Retail, like its sister entity Jio Platforms, is attracting investments in a big way. After Silver Lake, KKR and General Atlantic, it is said to be in talks with Abu Dhabi state fund Mubadala Investment Co. The latter who is also a stakeholder in Jio Platforms,  is said to be in advanced talks to invest up to $1 billion in Reliance Retail.

Reports have it that Japan's SoftBank Group is also keen on investing in Reliance Retail.

It may be recalled that addressing shareholders at Reliance Industries 43rd annual general meeting recently, Mukesh Ambani had said "Reliance Retail has received strong interest from strategic and financial investors."

Ambani explained his plans to add newer categories like electronics, fashion, pharmaceutical and healthcare into its omni-channel venture, JioMart.

Jio Mart is positioned to take on Walmart-backed Flipkart and the other behemoth in the business Amazon

The Ambani-Amazon face off is being billed as a major battle in the Indian e-commerce sphere.

Jio Mart, apart from using the inventory of kirana stores in each neighbourhood, hopes to ride piggyback on the massive infrastructure Reliance Retail is building. 

Reliance Retail is pushing merchants to use technology tools and create an efficient supply chain infrastructure to help deliver a superior value proposition to the customers. 

Reliance Retail recently picked a stake in Kishore Biyani-led Future Group.

Date

30 Sep 2020

Sources


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