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General Atlantic to invest Rs 3,675 crore for 0.84% stake in Reliance Retail

The investment will add fire to Ambani’s battle for dominance in the retail market that is also being eyed by Jeff Bezos’ Amazon.

General Atlantic to invest Rs 3,675 crore for 0.84% stake in Reliance Retail

Reliance Retail Ltd, a Subsidiary of RRVL, operates about 12,000 stores in nearly 7,000 towns, with 640 million footfalls. (Photo: IANS)

Global growth equity firm General Atlantic will invest Rs 3,675 crore into Reliance Industries’ retail arm to buy 0.84 per cent stake in the company, the Mukesh Ambani-owned Reliance Industries announced on Wednesday.

This is the third private equity investment in Reliance Retail Ventures Ltd., following US-based private equity firm Silver Lake’s Rs 7,500 crore investment for a 1.75 per cent stake and global private equity firm KKR’s Rs 5,550 crore investment for a 1.28 per cent stake earlier this month.

In a BSE filing the company said, “General Atlantic, a leading global growth equity firm, will invest ₹ 3,675 crore into RRVL, a subsidiary of Reliance Industries. This investment values Reliance Retail at a pre-money equity value of ₹ 4.285 lakh crore. General Atlantic’s investment will translate into a 0.84% equity stake in RRVL on a fully diluted basis.”

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This marks the second investment by General Atlantic in a subsidiary of Reliance Industries, following a ₹ 6,598.38 crore investment in Jio Platforms announced earlier this year.

Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said, “I am pleased to extend our relationship with General Atlantic as we work towards empowering both merchants and consumers alike, and ultimately transforming Indian Retail. Like Reliance Retail, General Atlantic believes in the fundamental ability of digital enablement to drive progress, growth, and inclusion across India and the world.”

“We look forward to leveraging General Atlantic’s extensive expertise at the intersection of technology and consumer businesses, and two decades of experience in investing in India, as we create a disruptive New Commerce platform to redefine retail in the country,” he added.

Reliance Retail Ltd, a Subsidiary of RRVL, operates about 12,000 stores in nearly 7,000 towns, with 640 million footfalls across core categories of grocery, consumer electronics and apparel. Revenues for Reliance Retail in FY20 was Rs 1.63 lakh crore.

The investment will add fire to Ambani’s battle for dominance in the retail market that is also being eyed by Jeff Bezos’ Amazon.com and Walmart Inc’s Flipkart.

Speaking about the deal Bill Ford, Chief Executive Officer of General Atlantic, said, “General Atlantic shares Reliance Industries’ foundational belief in the power of technology to foster transformative growth, and we are excited by the immense potential of the full Reliance ecosystem. We are honoured to again be partnering with the Reliance team to meaningfully accelerate India’s position in the global digital economy.”

General Atlantic has a longstanding tradition of backing disruptive entrepreneurs and companies around the world, including Airbnb, Alibaba, Ant Financial, Box, ByteDance, Facebook, Slack, Snapchat, Uber and other global technology leaders.

The transaction is subject to regulatory and other customary approvals. Morgan Stanley acted as financial advisor to Reliance Retail and Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as legal counsels. Shardul Amarchand Mangaldas & Co and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal counsel to General Atlantic.

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