Silver Lake Partners Make High Profile Investment in Reliance Industries, JioMart To Become The New Retail Monopoly?

Silver Lake Partners invest ₹ 7,500 crores in Reliance Retail
Silver Lake Partners invest ₹ 7,500 crores in Reliance Retail

Reliance Industries recently said that they agreed with the US-based private equity fund Silver Lake Partners, who will invest ₹ 7,500 crores for a 1.75 equity stake in Reliance Retail. Reliance retail is the retail chain arm of the Reliance Industries Ltd. which is led by Mukesh Ambani, the richest man of India.

Who are Silver Lake Partners?

Silver Lake Partners is an American private equity firm. They are involved in and focuses investments on worldwide large scale investments in technology, technology-enabled, and related industries. The firm was founded in 1999 during the late 1990s tech boom to make private equity investments in mature technology companies.

The firm, founded by Jim Davidson, David Roux, Roger McNamee, Glenn Hutchins has its headquarters in Silicon Valley and has its offices in New York, London, and Hong Kong.

Companies like Airbnb, Alibaba Group, Ancestry, Broadcom, Credit Karma, City Football Group, Dell Technologies, Endeavor, Expedia Group, Fanatics, First Advantage, Global Blue, GoDaddy, Jio, Lightbox, Motorola Solutions, NortonLifeLock, Red Ventures, Sabre Corporation, Skype, SoFi, GLG, Seagate Technology, SolarWinds, TEG, Twitter, Unity, Waymo, Weld North Education, WP Engine, Vacasa, and ZPG are included in their investment holdings.

Silver Lake Partners invest in Reliance:

Earlier, Silver Lake Partners had invested in the Jio platform which is also a subsidiary of Reliance Industries. They had invested $ 1.35 billion or ₹ 10,200 crores in Jio for a 2.08 percent stake of the company in two tranches earlier this year.

The new investment comes in the retail arm of the company. This investment values the company at a pre-money equity value of Rs 4.21 lakh crore.

After the new investments, Reliance retail and Jio platforms now account for over 9 lakh crores of Reliance Industries Ltd’s valuation.

Mukesh Ambani, Chairman and Managing Director of Reliance Industries and the fourth richest man in the world commented on the new investment as he 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 the 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 also commented on their investment in the Indian retail firm saying, “We are pleased to deepen our relationship with Reliance on 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 period, 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.”

Mukesh Ambani’s Reliance Industries have been on the move for the recent weeks as they make their moves into new sectors. Recently they caught everyone’s eyes as they entered the pharmaceutical industry. Reliance Retail also acquired Future Group’s retail, wholesale, logistics, warehousing biz in a slump sale, a few weeks back. They also opened up JioMart, an online grocery delivery service in May. Recently they have also tied up with WhatsApp to connect customers with local Kirana stores.

The investment cements the position of Reliance in the retail market. Many tips the firm might be the one to lead a disruptive technology-led transformation of the Indian retail sector post-COVID-19 pandemic.

Reliance Retail has a large range of products and has access to deliver them in most corners of the country operating from almost 12,000 stores in nearly 7,000 towns. This investment will add to the firm’s fight for dominance in the retail segment in the Indian subcontinent, where it competes with giants like Jeff Bezos’ Amazon.com and Walmart Inc’s Flipkart.

 

 

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