Silver Lake to invest Rs 7,500 crore in Reliance Retail Ventures
Mumbai, September 9, 2020
The Mukesh Ambani-led Reliance Industries Limited (RIL) and Reliance Retail Ventures Limited (RRVL) announced today that Silver Lake will invest Rs 7,500 crore into RRVL, a subsidiary of RIL.
The investment values RRVL at a pre-money equity value of Rs 4.21 lakh crore, a press release from the company said.
Silver Lake’s investment will translate into a 1.75% equity stake in RRVL on a fully diluted basis, it said.
This marks the second billion dollar investment by Silver Lake in a Reliance Industries subsidiary after the $1.35 billion investment in Jio Platforms announced earlier this year.
RRVL operates India's largest, fastest growing and most profitable retail business serving close to 640 million footfalls across its 12,000-odd stores nationwide.
"Reliance Retail’s vision is to galvanize the Indian retail sector through an inclusive strategy serving millions of customers by empowering millions of farmers and micro, small and medium enterprises (MSMEs) and working closely with global and domestic companies as a preferred partner, to deliver immense benefits to Indian society, while protecting and generating employment for millions of Indians," the release said.
According to it, Reliance Retail, through its New Commerce strategy, has started a transformational digitalization of small and unorganised merchants and is committed to expanding the network to over 20 million of these merchants, helping them benefit from the use of technology tools and efficient supply chain infrastructure to deliver a superior value proposition to their own customers.
With more than $60 billion in combined assets under management and committed capital and a focus on the world’s great tech and tech-enabled opportunities, Silver Lake is the global leader in large-scale technology investing. Its mission is to build and grow great companies by partnering with world-class management teams. Its other investments have included Airbnb, Alibaba, Alphabet’s Verily and Waymo units, Dell Technologies, Twitter and numerous other global technology leaders.
Commenting on the transaction with Silver Lake, Mukesh Ambani, Chairman and Managing Director, Reliance Industries, said, “I am delighted to extend our relationship with Silver Lake to our transformational efforts of building an inclusive partnership with millions of small merchants while providing value to Indian consumers across the country in the Indian retail sector. We believe technology will be key to bringing the much-needed transformation in this sector so that various constituents of the retail ecosystem can collaborate to build inclusive growth platforms. Silver Lake will be an invaluable partner in implementing our vision for Indian Retail.”
Egon Durban, Co-CEO and Managing Partner of Silver Lake, said, “We are pleased to deepen our relationship with Reliance with this investment. Mukesh Ambani and his team at Reliance have created an outstanding world leader in retail and technology through their courageous vision, commitment to societal benefits, innovation excellence and relentless execution. The success of JioMart in such a short time span, especially while India, along with the rest of the world, battles the COVID-19 pandemic, is truly unprecedented, and the most exciting growth phase has just begun. Reliance’s New Commerce strategy could become the disruptor of this decade. We are thrilled to have been invited to partner with Reliance in their mission for Indian Retail.”
The transaction is subject to regulatory and other customary approvals, the release said.
Morgan Stanley acted as financial advisor to Reliance Retail and Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as legal counsels. Latham & Watkins and Shardul Amarchand Mangaldas & Co acted as legal counsels for Silver Lake.