Abu Dhabi state fund picks up 1.4% stake in Reliance Retail; Silver Lake pumps in an additional $256 mn

Abu Dhabi based sovereign firm Mubadala Investment Company on Thursday said that it will invest about $852.5 million (Rs 6,247.5 crore) into Reliance Retail (RRVL) for a 1.40% stake of the business unit.

Separately, Silver Lake committed to invest an additional $256 million (Rs 1,875 crore) into the Mukesh Ambani led retail major.

The Menlo Park, California headquartered private equity firm,  which focuses globally on investments in the technology sector,  had announced a $1.02 billion investment in RRVL, three weeks ago. It will now own a 2.13% stake in Reliance Retail Ventures, in aggregation of the two funding rounds.

The Mumbai headquartered retailer is currently on an aggressive expansion drive to build out an omnichannel play for its businesses.

The latest investments value Reliance Retail at a pre-money equity value of Rs 4.285 lakh crore ($58.5 billion as per current exchange rate), as per statements to the stock exchanges.

Reliance Retail registers 640 million footfalls across its 12,000 stores in India, the statement said adding that through a “new commerce” strategy it has started a transformational digitalization of small and unorganised merchants and is committed to expanding the network to over 20 million of these merchants. 

RIL has made significant acquisitions in a handful of digital businesses over the years. It is a majority owner in fashion ecommerce platform Fynd, education startup Embibe, and epharmacy Netmeds. In the long term, it is expected that the oil-to-telecom conglomerate will bring all of its consumer internet offerings under the Reliance Retail umbrella to create an omnichannel retail world to take on the mighty Amazon and Walmart-owned Flipkart.

While Mubadala's deal marks its second interest in Reliance-owned business, Silver Lake’s deal is its fourth time bet into Reliance.

In June, Mubadala Investment Company invested about $1.2 billion in Jio Platforms. In May, Silver Lake had committed $1.3 billion to Jio Platforms across two rounds.

Jio Platforms, which houses Reliance’s telecom and digital services businesses, has so far raised nearly $21 billion (Rs 1,52,056 crore) from a clutch of strategic and financial investors, including Facebook, Google, Vista Equity Partners, General Atlantic, KKR, Abu Dhabi Investment Authority, L Catterton, TPG Capital, Intel Capital, and Qualcomm.

Reliance’s ecommerce venture JioMart, a joint venture between Jio Platforms and Reliance Retail, is poised for strong growth as it beefs up its supply chain, warehousing and logistic capabilities, and physical presence across the country.

In May, the firm launched JioMart across 200 towns to supply fresh produce, staples, grocery, personal care, home care and baby care products through an app.

In August, Reliance Retail announced the acquisition of Future Group’s retail and wholesale, and the logistics and warehousing businesses for a lump sum of $3.38 billion. As per the contract, the retail and wholesale unit will be transferred to newly incorporated Reliance Retail and Fashion Lifestyle, a wholly-owned subsidiary of Reliance Retail Ventures, while the logistics and warehousing unit will be transferred to Reliance Retail Ventures.