General
Atlantic will invest Rs 3,675 crore in Reliance
Retail Ventures, which will value Mukesh
Ambani's retail arm at a pre-money equity value of Rs 4.285 lakh
crore. General Atlantic’s money will translate into a 0.84% equity stake in Reliance Retail on a fully diluted basis.
This is General Atlantic's second investment in a subsidiary
of Reliance
Industries NSE -0.48 %, following a Rs
6,598.38 crore investment in Jio Platforms announced earlier this year.
Reliance Retail is on a fund raising spree and has secured
around $1.8 billion in the past few weeks from KKR & Co and Silver Lake
Partners.
Reliance, controlled by Asia's richest man Mukesh Ambani, has
approached investors, who collectively pumped more than $20 billion into its
Jio Platforms digital business this year, to take stakes in its retail
business, which has nearly 12,000 stores and sells everything from groceries
and electronics to fashion and shoes.
“I am pleased to extend our relationship with General
Atlantic as we work towards empowering both merchants and consumers alike, and
ultimately transforming Indian Retail," Ambani said in a statement.
Global investors are vying for a piece of India’s burgeoning
$800 billion annual retail market that is expected to swell to $1.3 trillion in
the next few years. Reliance Retail, as the market leader, is well placed to
corner a chunk of that market with its combination of brick-and-mortar retail
and its JioMart ecommerce initiative. Reliance is planning to combine its
network of about 12,000 physical outlets with JioMart and enlist millions of
kirana shops as last-mile delivery agents in its multi-channel New Commerce
initiative.
JioMart rolled out services in 200 cities in May selling food and grocery. It plans to extend its portfolio to fashion and electronics in the coming months to take on Walmart-owned Flipkart and Amazon directly.
RIL is looking to raise Rs 60,000-63,000 crore by selling about 15% of Reliance Retail to a bevy of global investors and induct an overseas strategic investor. ET had also reported that Saudi Arabia’s Public Investment Firm, Abu Dhabi-based Mubadala Investment, Abu Dhabi Investment Authority, KKR and L Catterton are likely to pick up stakes.
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