Silver Lake seems to like making investments in Reliance Industries companies in two tranches. It did so with Jio Platforms (here and here.) Now, after putting in Rs 7500 crore in Reliance Retail, Silver Lake through its co-investors has decided to invest an additional Rs 1,875 crore into Reliance Retail.
This brings the aggregate investment by Silver Lake and its co-investors in Reliance Retail to Rs 9,375 crore, which will translate into a 2.13% equity stake. This latest investment values Reliance Retail at a pre-money equity value of Rs 4.285 lakh crore.
Reliance Retail operates India's largest and fastest growing retail business serving close to 640 million footfalls across its 12,000 stores nationwide.
Reliance Retail, through its New Commerce strategy, has started the digitalization of small and unorganised merchants and is committed to expanding the network to over 20 million of these merchants. This will enable the merchants to use technology tools and an efficient supply chain infrastructure to deliver a superior value proposition to their customers.
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Reliance and Silver Lake happy to join forces again
Commenting on the aggregate investment brought by Silver Lake, Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said in a statement, “Silver Lake and its co-investors are valued partners on our journey to transform Indian Retail for the benefit of all Indians. We are pleased to have their confidence and support, as well as the benefit of their leadership in global technology investing and their valued network of relationships for the Retail revolution in India. Silver Lake’s additional investment is a strong endorsement of the tremendous potential of Indian Retail and the capabilities of Reliance Retail.”
Commenting on the investment, Egon Durban, Co-CEO and Managing Partner of Silver Lake, said, “We are delighted to increase our exposure and bring more of our co-investors into this unmatched opportunity. The continued investment momentum over the last few weeks is proof of the compelling vision and business model of Reliance Retail – and underscores the tremendous potential of the transformative New Commerce initiative.”
Amazon, Flipkart too ready to up the ante
Indian e-commerce space, dominated by Amazon, Flipkart and Jio Mart (linked to Reliance Retail) is set for a major battle.
Reliance Retail and Jio Mart (with the help of Jio Platforms) have been getting huge funds and are making major inroads in recent times. Reports have it that Japan's SoftBank Group is also keen on investing in Reliance Retail.
Ambani explained his plans to add newer categories like electronics, fashion, pharmaceutical and healthcare into its omni-channel venture, JioMart.
Reliance Retail recently picked a stake in Kishore Biyani-led Future Group.
Jio Mart is positioned to take on Walmart-backed Flipkart and the other behemoth in the business Amazon.
The other two are no slouches when it comes to getting funds to sharpen their competitive presence.
Walmart, which owns Flipkart, recently invested $560 million in it, as part of its $1.2 billion round announced in July. Qatar Investment Authority’s subsidiary INQ Holdings also invested $8.14 million as part of the round.
China’s Tencent has also put in $62.8 million into the e-commerce company. Flipkart is expected to go public internationally in a few months time.
And Amazon has recently infused Rs 1,125 crore in fresh capital into its Indian unit, Amazon Seller Services.
So, all in all, there is battle royal in the offing in the e-commerce and retail market place.
