October 4, 2022
Reliance said, contact Jio Platform supporters to invest in retail arm

India’s Reliance has approached investors in its digital business about potentially buying a stake in its retail arm, two sources with direct knowledge of the matter said on Thursday.

The oil-to-telecom conglomerate is looking to attract more investors into Reliance Retail as the business expands rapidly online to the likes of Walmart’s Flipkart and Amazon’s Indian arm.

Earlier this year, Reliance, controlled by Asia’s richest man Mukesh Ambani, sold nearly 33 percent of its Jio Platforms digital business, raising $20 billion (about $1 billion) from companies including Facebook, Alphabet’s Google, KKR and Silver. ,47,020 crore) earned more than Rs. Lake.

Mumbai-based Reliance has approached some investors from that deal to take a stake in the retail business, although “it is understood that not all will participate”, one of the sources told Reuters, adding that the talks are private.

The sources did not specifically name which companies Reliance had approached.

A third source said Saudi Arabia’s Public Investment Fund (PIF) and Abu Dhabi State Fund Mubadala Investment Company, both backers of Jio Platforms, are also weighing potential investments.

“It is a strategic relationship these funds have with Reliance that goes beyond a deal,” this source said.

PIF and Mubadala declined to comment.

Reliance Retail, which has around 12,000 stores and sells everything from groceries to iPhones, acquired Future Group’s retail arm last month.

This week, it announced an investment of $1 billion (about Rs 7,341 crore) from US private equity firm Silver Lake.

“We have received strong interest from strategic and financial investors in Reliance Retail,” Ambani told shareholders at the company’s annual meeting in July.

amazon talks

Bloomberg News on Thursday, citing an unidentified person with knowledge of the matter, said that Reliance is offering to sell around 40 per cent stake in its retail arm, valued at around $20 billion (about Rs 147020 crore), to Amazon. Still working.

Amazon is in talks to invest in Reliance Retail and has expressed interest in negotiating potential deals, but has not made a decision, according to Bloomberg. report good Told.

Reuters could not independently verify whether Amazon and Reliance were in the latest discussions.

Last year, Reuters reported that Amazon was considering a proposal to buy up to 26 percent stake in Reliance Retail. Earlier this year, The Economic Times reported that Amazon was in talks to buy a 9.9 percent stake in Reliance Retail.

Amazon did not respond to Reuters’ request for comment.

Reliance said it did not comment on speculation and rumours, adding it “evaluates various opportunities on an ongoing basis.”

stock jump

Reliance’s shares rose 8.5 per cent on Thursday, making it the first listed Indian firm to achieve a market capitalization of over $200 billion (about Rs 1,469,950 crore).

Ambani, the world’s fifth richest man, is shifting the focus of his empire to retail, hopefully a dominant position in India’s vast consumer market, after successfully building India’s largest telecom network by customers in four years. expected to take.

For Reliance, a deal with Amazon could potentially leverage the e-commerce giant’s global experience in technology, supply chain and logistics, as it aims to bring mom-and-pop stores across India to its Jio telecom network. digitally connected.

For Amazon, a stake in Reliance Retail could give it access to the Jio telecom platform and its huge retail footprint across India. It could also add more firepower to Amazon’s local lobbying efforts, as the Ambani family is well-connected.

The reported discussion comes at a time when Amazon is facing strict regulatory scrutiny and anti-trust cases in India, with brick-and-mortar retailers accusing it of operating its online marketplace in the country. Uses unfair business practices, a charge Amazon denies.

© Thomson Reuters 2020


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