Reliance Industries Ltd said Wednesday private equity firm Silver Lake will invest Rs 7,500 crore ($1.02 billion) in its retail unit, marking the second billion-dollar bet in a group company.
Silver Lake’s investment in Reliance Retail Ventures Ltd will translate into a 1.75% equity stake on a fully diluted basis, the Indian energy-to-telecom conglomerate said in a statement.
This investment values Reliance Retail Ventures at a pre-money equity value of Rs 4.21 trillion, RIL said.
The PE firm had invested around $747 million in RIL’s digital services unit, Jio Platforms Ltd, in May and committed $600 million more in June.
The Reliance Retail deal comes a day after Silver Lake agreed to invest in Byju’s, India’s biggest ed-tech company.
“We believe technology will be key to bringing the much-needed transformation in this sector so that various constituents of the retail ecosystem can collaborate to build inclusive growth platforms,” RIL chairman and managing director Mukesh Ambani said.
RIL, India's biggest company by market value, has been expanding its retail business as well as its telecom and digital services operations as it diversifies away from its core energy business. Late last month, the conglomerate agreed to acquire Future Group's retail business in a multi-billion-dollar deal.
Apart from Silver Lake, other marquee PE firms are also reportedly in talks to invest in Reliance Retail. Bloomberg reported that KKR is in advanced talks to invest at least $1 billion in the retail business.
The announcement could be made as soon as this month, the report said, citing people aware of the development. In May, the US-based investment giant announced a $1.5 billion (around Rs 11,367 crore) commitment to Jio Platforms.
Other PE firms and technology giants that invested in Jio Platforms included Facebook, Google, Qualcomm, Intel, Saudi Arabia’s Public Investment Fund, TPG, L Catterton, Abu Dhabi Investment Authority and Mubadala Investment Company.
In June, RIL said it had become net-debt free through its stake sales and a rights issue worth $7 billion. At the time, Ambani said strong investor interest in Jio Platforms and RIL’s consumer businesses would help the two units move towards a public listing in the next five years.
The latest investment by Silver Lake is subject to customary and regulatory approvals. Morgan Stanley, Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as the financial and legal advisors to Reliance Retail, while Latham & Watkins and Shardul Amarchand Mangaldas acted as counsel for Silver Lake.
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