Silver Lake is in talks to invest around $ 1 billion in Mukesh Ambani’s Reliance Retail at a valuation of about $ 57 billion, as the Silicon Valley private equity group looks to deepen its ties with India’s richest man. said people with direct knowledge of the matter.
The negotiations come as Reliance Retail, controlled by Ambani’s holding company, Reliance Industries, aims to raise $ 5.7 billion by selling about 10 percent in new shares, the people briefed on the matter said.
Foreign investors have been lining up for months to back Ambani’s ventures as the powerful Mumbai-based mogul has de facto become a gateway to India’s fast-growing consumer and digital market. Earlier this year, it raised $ 20 billion of investment for its burgeoning digital business Jio Platforms from 13 global investors.
Silver Lake was the first US private equity firm to invest in Jio after tech giant Facebook acquired a $ 5.7 billion stake in the company. Rival private equity groups KKR, Vista and General Atlantic also took similarly sized stakes of around $ 1 billion or more. Other notable investors include Google and Abu Dhabi’s Mubadala sovereign wealth fund.
All Jio investors have also had a chance to back Reliance Retail, those briefed on the matter said.
Under Ambani’s leadership, Reliance has set out to diversify beyond its traditional refining and petrochemical operations into consumer-oriented businesses, including retail and telecommunications.
Reliance Retail, founded in 2006, is India’s largest brick and mortar retail business, ranging from groceries to electronics. Last year, Reliance bought the British toy chain Hamleys, and also manages the Indian outlets of global brands, including Tiffany jewelry.
Ambani said in July that Reliance had “received great interest from strategic and financial investors in Reliance Retail” and that it would finalize investments and partnerships in the coming quarters.
Last week, Reliance agreed to buy the retail and logistics assets of Future Group, India’s second-largest retailer, for $ 3.4 billion. The deal will give Reliance control of roughly one-third of the brick-and-mortar stores in India’s otherwise fragmented retail sector.
Reliance is now lining up to take on global e-commerce giants like Amazon and Walmart, which owns local group Flipkart, in a bid to tap into the fast-growing market for online shopping.
This year, the conglomerate launched an e-commerce company, JioMart, which sought to bridge India’s huge informal retail market by matching consumers with local stores to deliver groceries and other essentials.
Jio, which launched in 2016, has grown into India’s largest telecom business with nearly 400 million subscribers and is now diversifying into a range of digital services, giving Reliance a formidable reach among the Indian consumers.
After Facebook’s investment, the companies announced that they would begin offering JioMart via WhatsApp, giving them access to the messaging platform’s 400 million user base.
Silver Lake and Reliance Retail declined to comment.
