Reliance acquiring majority stakes in Grab, C-Square to boost hybrid commerce biz

Mukesh Ambani-led Reliance Industries Limited (RIL) has agreed to acquire an 83% majority stake in Mumbai-based hyperlocal delivery platform Grab.

In a stock exchange disclosure, RIL said that its wholly-owned subsidiary Reliance Industrial Investments and Holdings Limited (RIIHL) will make an initial equity investment of up to Rs 106 crore ($15 million) into Grab a Grub Services Pvt. Ltd, which operates Grab.

It will also further invest Rs 40 crore ($5.63 million), which will be completed by March 2021, the disclosure stated.

With both the tranches combined, RIL’s total investment in Grab will amount to Rs 146 crore ($20.58 million).

The investment, which does not require regulatory approvals, is expected to complement the company’s digital commerce initiatives and strengthen its logistics services, catering to both business-to-business and business-to-consumer segments, the filing added.

The development comes a little under a week after The Times of India had reported that RIL was in talks to acquire a stake in Grab.

Launched in 2012 by Prashant Sanghvi, Nishant Vora and Jignesh Patel, Grab offers third-party last-mile delivery services to businesses and merchants, including restaurants, e-commerce companies, retailers, grocers, pharmacies, food-tech platforms and banks.

Dubai-based logistics firm Aramex Ventures, early-stage investment firm Oliphans Capital, restaurant listings and food delivery firm Zomato, state-run SIDBI, venture capital firm Sixth Sense Ventures and Haresh Chawla of India Value Fund Advisors are among Grab’s investors.

In June 2016, Aramex Ventures said it would invest Rs 20 crore in Grab. The investment was completed in June 2017.

Grab registered a turnover of Rs 28.39 crore and net losses of Rs 7.52 crore for the financial year 2017-18, the filing stated.

C-Square

In another move to boost its e-commerce business, RIL will acquire an 82% majority stake in Bengaluru-based software solutions firm C-Square, it said in a separate stock exchange disclosure.

RIIHL will make a cash investment of Rs 82.04 crore ($11.56 million at current rates) in exchange for the stake. The company will make this investment in two tranches—it will initially put in Rs 22.04 crore ($3.1 million), followed by Rs 60 crore ($8.45 million), which it expects to complete by 2021, the disclosure stated.

C-Square Info Solutions Private Limited was founded in 2002 by Sripal Bachawat and Sajith T. The company provides software solutions, specifically catering to the pharmaceutical sector, for various functions such as cost and freight, distribution, retail, online e-commerce, sales force and automation, the filing stated.

For the financial year 2017-18, the company registered a turnover of Rs 13.5 crore and net losses of Rs 41.24 lakh, the disclosure stated.

Several media reports have stated that RIL is set to launch a hybrid commerce platform led by its associate arms, Reliance Retail and Reliance Jio.

RIL’s hybrid commerce venture will further heat up competition in the e-commerce space, which is dominated by Walmart-owned Flipkart and US-based Amazon.