India's Reliance Retail marks close of $6.4b fundraise
Indian conglomerate Reliance Industries has announced the completion of a funding round for its retail unit with INR472.7 billion ($6.4 billion) in commitments from eight investors.
The new shareholders came in at a pre-money valuation of INR4.28 trillion and together hold a 10.09% interest, according to a filing. Silver Lake was the first to invest – pledging INR75 billion in early September and then adding another INR18.8 billion – and holds the largest individual interest of 2%. The others are KKR, Mubadala Investment, Abu Dhabi Investment Authority (ADIA), GIC Private, TPG Capital, General Atlantic, and Saudi Arabia’s Public Investment Fund.
GIC is the only investor that didn’t also participate in the Jio Platforms round earlier this year. Jio Platforms is a Reliance Industries-owned holding company for a range of apps, some nascent broadband and cable services, and India’s leading mobile carrier. It 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.
Jio Platforms and Reliance Retail are pursuing complementary “new commerce” strategies. JioMart, in which they both hold interests, is intended to serve as an online platform through which Jio Platforms customers order daily goods. An offline store network is already being built out. Reliance Retail, meanwhile, wants to drive supply-side digitization. Its goal is to help 20 million merchants – many based in rural areas – apply technology solutions to their retail processes and supply chain infrastructure.
"We feel honored by the phenomenal interest shown by investors in our business and look forward to working with our partners to benefit from their experience and global connectivity. With our focus on new commerce, we are committed to playing a transformational role in the Indian retail sector by empowering millions of merchants and micro, small and medium enterprises,” said Isha Mukesh Ambani, a director of Reliance Retail Ventures, in a statement.
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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