The retail arm of Reliance Industries, owned by billionaire Mukesh Ambani, has acquired a 96 percent stake in online furniture retailer Urban Ladder for more than 182 million rupees.
“Reliance Retail Ventures Ltd (RRVL), a subsidiary of Reliance Industries (RIL), has acquired shares of Urban Ladder Home Decor Solutions Pvt Ltd for a cash consideration of Rs 182.12 crore,” RIL said in a statement on Saturday.
The investment represents a 96 percent stake in Urban Ladder’s capital stock, he added.
“RRVL has an additional option to acquire the remaining stake, bringing its stake to 100 percent of Urban Ladder’s capital stock,” he said.
In addition, RRVL has proposed to make an additional investment of up to Rs 75 million in Urban Ladder.
“The additional investment is expected to be completed in December 2023,” he said.
This acquisition will help RIL strengthen its presence in the fast-growing e-commerce segment and expand the range of consumer products it offers as it seeks to compete with leading e-commerce companies such as Amazon and Flipkart.
“The aforementioned investment will further enable the group’s new commercial and digital initiatives and expand the group of consumer products provided by the group, while improving user engagement and experience across all of its retail offerings,” the statement said.
According to RIL, no government or regulatory approvals were required for the investment.
In August, RIL had acquired a majority stake in the Netmeds digital pharmaceutical market for around Rs 620 crore.
RIL, which has been on a fundraising spree selling shares in RRVL, had earlier this month announced an investment of Rs 9,555 crore from the Saudi Arabian Public Investment Fund, bringing total fundraising into the last two months at 47,265 crore.
The investment had valued RRVL at a pre-money equity value of Rs 4,587 lakh crore.
Reliance Retail Ltd, a subsidiary of RRVL, operates India’s largest and fastest growing retail business, with nearly 640 million visits to its 12,000 stores nationwide.
Amazon, Reliance and Walmart Inc.’s Flipkart are locked in a battle to gain market share in India, where millions of middle-class customers are embracing food and grocery online shopping due to the Covid-19 pandemic.
The country’s booming e-commerce market will be worth $ 86 billion by 2024, according to research firm Forrester.
The stakes are particularly high for Amazon, which believes India is a high-growth market after closing its online store in China last year.
Reliance Retail’s vision is to boost the Indian retail sector through its new commerce strategy, serving millions of customers by empowering micro, small and medium-sized enterprises (MSMEs), RIL had previously said.
RRVL had previously raised Rs 37,710 crore from major global investors including Silver Lake, KKR, General Atlantic, Mubadala, GIC, TPG and the Abu Dhabi Investment Authority (ADIA).
Urban Ladder was co-founded by Ashish Goel (CEO) and Rajiv Srivatsa (COO) in July 2012.
In 2014, Tata Sons Chairman Emeritus Ratan Tata had also invested in Urban Ladder, although the amount was not disclosed. In the past, the company had also raised funds from venture capital funds such as Sequoia Capital, SAIF Partners, Kalaari Capital, and hedge fund Steadview Capital.
In addition to online, the company has a presence in offline channels and operates a chain of retail stores in various cities in India such as Bangalore, Chennai, Mumbai, NCR, Pune and Hyderabad.
Urban Ladder’s audited turnover in 2018-19 was Rs 434.00 crore and the profit was Rs 49.41 crore.
.
