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

US-based private equity firm General Atlantic will invest an amount of Rs 3,675 crore in Reliance Retail Ventures in exchange for a 0.84 percent stake, the third strategic investment in the retail unit of Reliance Industries Ltd (RIL), within a month. The investment values Reliance Retail at a pre-money equity value of Rs 4.28 lakh crore, which is more than the previous two deals done at a valuation of Rs 4.21 lakh crore. Reliance Retail Venture’s subsidiary Reliance Retail operates India’s largest retail business serving close to 640 million footfalls across its 12,000-odd stores nationwide in 7000 cities. Reliance Industries Limited is expanding its retail business and lining up a posse of global investors to take on rivals such as Amazon India and Walmart-owned Flipkart in India’s huge market. The latest investment by General Atlantic can be seen as an endorsement of Reliance Retail’s ability to lead a transformation of the Indian retail sector through technological innovations. This is also the second investment by General Atlantic in a Reliance enterprise. In May this year, it had said it will invest Rs 6598 crore in Jio Platforms, the digital services platform of RIL. The transaction is subject to regulatory and other customary approvals. In early September, private equity giant Silver Lake Partners had said it would invest Rs 7,500 crore in Reliance Retail Ventures for a 1.75 percent stake. Last week, another leading private equity player KKR & Co said it would invest Rs 5550 crore in Reliance Retail Ventures for a 1.28 percent stake Last month, Reliance Retail had announced the acquisition of the retail and logistics businesses of Kishore Biyani’s Future Group in a $3.38 billion deal, including debt. Commenting on the deal, 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 investing in India, as we create a disruptive New Commerce platform to redefine retail in the country.” (Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Firstpost)