Silver Lake Partners, which is the U.S. private equity company, is going to invest 75 billion rupees ($1.02 billion) in Mukesh Ambani’s Reliance Industries, the firm told in an announcement Wednesday.
Silver Lake’s investment, which gives it a 1.75% stake in Reliance Retail, estimates the retail firm at $56.9 billion (4.21 trillion rupees).
Mukesh Ambani, who is working as a Reliance's chairman and managing director and
whose net worth is about $82.5 billion, said in an announcement that he was “delighted to extend” his group’s involvement with the private equity firm to “our transformational efforts of building an inclusive partnership with millions of small merchants while providing value to Indian consumers across the country.”
Reliance started JioMart in May, which is an online supermarket service intended to compete with the likes of Amazon and Walmart-owned Flipkart, and others in the industry.
Egon Durban who is the co-CEO and managing partner of Silver Lake, pointed to that platform in an announcement telling, “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 Retail, which was launched in 2007, netted $726 million on the income of $21.7 billion for the financial year ending March.
According to retail consultancy, Technopak India’s retail market is expected to be $825 billion in sales (at pre-COVID-19 levels) of which 12% or almost $100 billion comes from the so-called organized area which includes e-commerce businesses as well as the neighborhood shops that throng the country.
Arvind Singhal who is the chairman of Technopak told the agreement was “remarkable” mainly since nobody in India, barring fellow billionaire Radhakrishna Damani’s supermarket chain DMart, had so far discovered a “winning formula” for the area.
Silver Lake’s investment in the retail industry appears weeks after Reliance sold 33% in Jio to a slew of global investors including Facebook, Google, and private equity companies, among others, boosting $20.2 billion in less than three months.
Ambani certainly has turned his focus to his retail business now as this sale comes less than two weeks after Reliance stated in late August that it would purchase retail pioneer Kishore Biyani’s Future Group for $3.3 billion. Biyani was among the country’s wealthiest in 2019.
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