Investors commit $1.6b to India's Reliance Retail

Growth equity specialist General Atlantic will pay INR36.8 billion ($500 million) for a 0.84% stake in Reliance Retail Ventures on a fully diluted basis. TPG and Mubadala have invested INR18.4 billion and INR62.5 billion, respectively, according to separate filings. They will own 0.41% and 1.4%. The deals give the target a pre-money valuation of INR4.28 trillion.

General Atlantic invested INR65.9 billion in Jio Platforms in May at an enterprise valuation of INR5.16 trillion. The following month TPG committed INR45.5 billion to the company, while Mubadala contributed INR90.9 billion.

Reliance Retail has now received approximately $3.6 billion from five investors. This includes INR93.8 billion from Silver Lake - which recently topped up an initial INR75 billion commitment with another INR18.8 billion - and INR55.5 billion from KKR. Both are also investors in Jio Platforms.

Mukesh Ambani-controlled Reliance Industries raised approximately INR1.5 trillion for Jio Platforms between April and July across a series of transactions involving brand-name financial investors as well as strategic players Facebook and Google. Jio Platforms owns a range of apps, some nascent broadband and cable services, and India’s leading mobile carrier.

E-commerce is central to the ecosystem strategy, with JioMart serving as the online platform through which consumers order daily goods and a network of Jio-branded convenience stores handling the distribution. This offline store network is already being built out, mainly by signing up independent retailers as distributors and putting Jio branding on their storefronts.

Meanwhile, Reliance Retail, operator of India’s largest brick-and-mortar retail network with 12,000 stores nationwide, is also pursuing a “new commerce” strategy. This involves the digitization of small-scale merchants. Its goal is to help 20 million merchants – many based in rural areas – apply technology solutions to their retail processes and supply chain infrastructure.

“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,” Bill Ford, General Atlantic’s CEO, said in a statement.

Sandeep Naik, the firm’s head of India and Southeast Asia, added that there is a pressing need for change in India’s retail ecosystem and Reliance Retail has come up with a “highly disruptive, and yet fully inclusive” solution. “It demonstrates a deep understanding of the diverse needs of India and Bharat, and the opportunity to provide more holistic omnichannel retail solutions to kiranas and consumers,” he added.

Khaldoon Al Mubarak, managing director and group CEO of Mubadala, said in a separate statement that digitization of India's consumer economy will deliver "opportunities and market access for millions of small businesses across the country."

Reliance Retail has a combination of neighborhood stores, supermarkets, wholesale outlets, specialty retailers, and online stores. Key assets include Reliance Fresh, Smart and Reliance Market in food and grocery, Reliance Digital and Jio in electronics, and Trends, Project Eve, and Ajio.com in fashion and lifestyle. It also operates stores for international partner brands.

Revenue came to INR1.6 trillion for the 12 months ended March 2020, up from INR1.3 trillion a year earlier. Over the same period, EBITDA rose 55.7% to INR96.5 billion. For Reliance Industries as a whole, revenue and EBITDA came to INR6.6 trillion and INR1 trillion, while net profit was INR443 billion. The parent company is prioritizing its retail, telecom, and digital businesses as a means of reducing its reliance on oil.

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• Topics
• South Asia
• Consumer
• Technology
• Expansion
• India
• General Atlantic
• Reliance Industries