Silver Lake Partners, a private equity group, is in talks to invest $1bn in Reliance Industries Ltd’s retail arm, the Financial Times reported on Thursday, citing people with direct knowledge of the matter.
The investment, which would be worth about $57 billion in Reliance Retail, comes as the company plans to sell about 10 percent of new shares, the study added.
Reliance, an oil-to-telecoms conglomerate owned by India’s wealthiest man, Mukesh Ambani, is pitching its retail business as a formidable force in the world’s second-most populous region, rapidly expanding to woo potential investors.
The company has raised more than $20 billion from global investors including Facebook Inc by selling shares in its digital business Jio Channels and has said it intends to draw investors to Reliance Retail in the next few quarters.
Recently, Reliance purchased the retail business of Future Group. According to various media sources, the contract, reportedly in the works for months now, has been priced at approximately ~29,000- some 30,000 crores. The Economic Times said on Friday that Reliance would take on the debt and liabilities of Future Group and pick up a minority stake in the consumer’s arm, citing two sources familiar with the matter.
Owned by India’s “father of modern retail,” Kishore Biyani, Future Group is home to the Big Bazaar supermarket chain, Foodhall upmarket grocery shops, and Brand Factory bargaining clothing chain.
The Company will combine five listed entities into Future Enterprises around the food, clothing, supply chain, and consumer market, which will then hive off all retail assets and sell them as a single entity to Reliance, the report said.
Earlier this week Future Enterprises had said it would meet on Saturday to discuss plans to collect funds via a bond issue.
Silver Lake was the first US private equity firm to invest in Jio after Facebook, a tech giant, took a 5.7 billion dollar stake in the company. Rival private equity firms KKR, Vista, and General Atlantic all took stakes of around $1bn or more of the same amount. Other prominent investors include the sovereign wealth fund Mubadala in Google and Abu Dhabi.
All Jio investors were also given an opportunity to back Reliance Retail, said those briefed on the matter.
Established in 2006, Reliance Retail is India’s biggest brick-and-mortar retail sector, spanning everything from groceries to electronics. Reliance acquired British toy chain Hamleys last year, and it also runs global brand outlets including jeweler Tiffany in India.
