Reliance Industries on Wednesday announced that US private equity firm Silver Lake Partners will invest Rs 7,500 crore in it for 1.75 per cent equity share of Reliance Retail Ventures (RRVL).
“Reliance Industries Limited and Reliance Retail Ventures Ltd (RRVL) announced today that Silver Lake will invest Rs 7,500 crore into RRVL, a subsidiary of Reliance Industries. This investment values RRVL at a pre-money equity value of ₹ 4.21 lakh crore. Silver Lake’s investment will translate into a 1.75% equity stake in RRVL on a fully diluted basis,” the company said in a statement.
This marks the second billion-dollar investment by Silver Lake in a Reliance Industries subsidiary after the $ 1.35 billion investment in Jio Platforms announced earlier this year.
“Reliance Retail Limited, a subsidiary of RRVL, operates India’s largest, fastest growing and most profitable retail business serving close to 640 million footfalls across its about 12,000 stores nationwide,” the statement said.
With more than USD 60 billion in combined assets under management and committed capital and a focus on the world’s great tech and tech-enabled opportunities, Silver Lake is the global leader in large-scale technology investing.
The company aims to build and grow great companies by partnering with world-class management teams. Its other investments have included Airbnb, Alibaba, Alphabet’s Verily and Waymo units, Dell Technologies, Twitter and numerous other global technology leaders.
After monetising Jio Platforms — which houses the firm’s telecom arm and digital ventures, richest Indian Mukesh Ambani is looking to rope in investors in the retail business. Reliance may be looking to sell about 10 per cent of Reliance Retail.
Late last month, Reliance acquired the retail and logistics businesses of Future Group for Rs 24,713 crore to boost its retail vertical.
It is worth mentioning that Silver Lake was the first US private equity firm to invest in Jio. It bought 2.08 per cent in Jio in two tranches for a total of Rs 10,202.55 crore.
Soon, rival private equity groups KKR, Vista and General Atlantic followed Silver Lake to take stakes in Jio. Other notable investors included Facebook, Google and Abu Dhabi’s sovereign wealth fund Mubadala.
All investors in Jio Platforms including Silver Lake have been offered a chance to explore investing in Reliance Retail.
Commenting on the transaction with Silver Lake, Ambani, Chairman and Managing Director, Reliance Industries, said, “I am delighted to extend our relationship with Silver Lake to our transformational efforts of building an inclusive partnership with millions of small merchants while providing value to Indian consumers across the country in the Indian retail sector.”
“We believe technology will be key to bringing the much-needed transformation in this sector so that the various constituents of the retail ecosystem can collaborate to build inclusive growth platforms. Silver Lake will be an invaluable partner in implementing our vision for Indian Retail,” he added.
Egon Durban, Co-CEO and Managing Partner of Silver Lake, said, “The success of JioMart in such a short time span, especially while India, along with the rest of the world, battles the Covid-19 pandemic, is truly unprecedented, and the most exciting growth phase has just begun. Reliance’s New Commerce strategy could become the disruptor of this decade. We are thrilled to have been invited to partner with Reliance in their mission for Indian Retail.”
The transaction is subject to regulatory and other customary approvals.
Morgan Stanley acted as financial advisor to Reliance Retail and Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as legal counsel. Latham & Watkins and Shardul Amarchand Mangaldas & Co acted as legal counsel for Silver Lake.