GIC backs Reliance Retail's India digitization drive

Reliance Retail Ventures has now raised approximately $4.3 billion from six investors. The capital will support a digitization strategy intended to give 20 million small-scale merchants – many based in rural areas – access to technology that can improve their retail processes and supply chain infrastructure.

GIC will take a 1.22% stake in Reliance Retail Ventures on a fully diluted basis, according to a filing. Its investment gives the target a pre-money valuation of INR4.28 trillion. The terms are the same as those enjoyed by Silver Lake, KKR, General Atlantic, TPG and Mubadala Investment, all of which have signed up to invest in the past few weeks.

Unlike its peers, GIC is not an investor in Jio Platforms, a Reliance Industries-owned holding company for a range of apps, some nascent broadband and cable services, and India’s leading mobile carrier. Jio Platforms raised INR1.5 trillion between April and July across a series of transactions involving brand-name financial investors as well as strategic players Facebook and Google.

While Reliance Retail’s “new commerce” strategy focuses on the supply side, Jio Platforms is looking to digitize demand. E-commerce is central to the Jio Platforms ecosystem, 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.

Reliance Retail operates India’s largest brick-and-mortar retail network with 12,000 points of sale nationwide, including 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
• Reliance Industries
• Reliance Retail Ventures Limited
• GIC Private