Mumbai: KKR & Co. will buy a $754 million stake in Reliance Industries Ltd.’s retail business, bolstering Mukesh Ambani’s plan to raise funds for his consumer operations.
The U.S. private equity group will hold a 1.28% stake in Reliance Retail Ventures Ltd., the Mumbai-based company said in a statement Wednesday, valuing India’s biggest retailer at 4.2 trillion rupees. The deal follows Silver Lake Partners’ $1 billion investment earlier this month in the retail unit controlled by Ambani’s refining-to-telecom conglomerate.
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The deal extends Ambani’s streak of stake sales to global tech giants, private equity and sovereign wealth funds who are betting on the rapid spread of broadband mobile access in India to fuel its e-commerce, online payments, education and health services. Reliance’s digital unit secured more than $20 billion from investors such as Facebook Inc., Google and Intel Corp. this year, even as the coronavirus pandemic roils the Indian economy.
Like Silver Lake, KKR is a repeat investor in Reliance’s consumer sector companies as Ambani seeks to pivot away from the energy businesses he inherited from his father, who died in 2002.
While Silver Lake paid $1.35 billion for a stake in Jio Platforms Ltd., KKR had earlier invested $1.5 billion in Reliance’s telecommunications and digital services arm.
Offer to Amazon
Reliance is said to have offered a $20 billion stake in its retail unit to Amazon.com Inc., a person familiar with the matter said this month. If successful, this would be the biggest ever deal for the American etailer as well as India.
Reliance Retail runs supermarkets, India’s largest consumer electronics chain store, a cash and carry wholesaler, fast-fashion outlets and an online grocery store called JioMart. It reported 1.63 trillion rupees in revenue in the year through March 2020. The unit operates almost 12,000 stores in nearly 7,000 towns.