Silver Lake is in talks to invest about $1bn in Mukesh Ambani’s Reliance Retail at a valuation of roughly $57bn as the Silicon Valley private equity group seeks to deepen its ties with India’s richest man, said people with direct knowledge of the matter.
The negotiations come as Reliance Retail, controlled by Mr Ambani’s holding company Reliance Industries, is aiming to raise $5.7bn by selling about 10 per cent in new shares, said the people briefed about the matter.
Foreign investors have been lining up for months to back Mr Ambani companies, as the powerful Mumbai-based tycoon has become a de facto gateway into India’s fast-growing digital and consumer market. Earlier this year he raised $20bn of investment for his booming digital business Jio Platforms from 13 global investors.
Silver Lake was the first US private equity firm to invest in Jio after tech giant Facebook took a $5.7bn stake in the company. Rival private equity groups KKR, Vista and General Atlantic also took similar-sized stakes of about $1bn or more. Other notable investors include Google and Abu Dhabi’s sovereign wealth fund Mubadala.
All the investors in Jio have also been given a chance to back Reliance Retail, said those briefed about the matter.
Under Mr Ambani, Reliance has set about diversifying beyond its traditional petrochemicals and refining operations into consumer-facing businesses including retail and telecoms.
Reliance Retail, founded in 2006, is India’s largest brick-and-mortar retail business, spanning everything from groceries to electronics. Reliance last year bought British toy chain Hamleys, and it also runs the India outlets of global brands including jeweller Tiffany.
Mr Ambani in July said Reliance had “received strong interest from strategic and financial investors in Reliance Retail” and would be finalising investments and partnerships in the coming quarters.
Reliance last week agreed to buy the retail and logistics assets of Future Group, India’s second-largest retailer, for $3.4bn. The deal will give Reliance control of about one-third of the bricks-and-mortar stores of India’s otherwise fragmented retail sector.
Reliance is now lining up to take on global ecommerce giants such as Amazon and Walmart, which owns local group Flipkart, in a drive to tap the fast-growing market for online shopping.
The conglomerate this year launched an ecommerce venture, JioMart, which sought to bridge India’s enormous informal retail market by pairing consumers with local shops to deliver groceries and other essentials.
Jio, which launched in 2016, has grown into India’s largest telecoms business with nearly 400m subscribers and is now branching into a range of digital services — giving Reliance formidable reach among Indian consumers.
After Facebook’s investment, the companies announced they would begin offering JioMart through WhatsApp, giving them access to the messaging platform’s 400m user base.
Silver Lake and Reliance Retail declined to comment.