General Atlantic Deal Adds More Muscle to Reliance Retail

The private equity funds company General Atlantic will acquire 0.84 percent stake in Reliance Retail Ventures Ltd. (RRVL). It is the second investment of the US-based firm in Reliance. Earlier this year, General Atlantic acquired stakes in Reliance Jio platform.

General Atlantic-Reliance Retail deal will add more muscle to RRVL to compete with rivals like Amazon and Walmart-backed Flipkart.

After attaining zero net-debt status for Reliance Industries (RIL), Mukesh Ambani is now preparing the pitch to open the innings in the retail front. Reliance Retail Ventures Ltd. would take on the giants like Amazon and Flipkart on the e-commerce frontier.  To further strengthen his fort, Ambani has already acquired Future Group’s retail, logistics and warehouse businesses from Kishor Biyani. The deal between General Atlantic and Reliance Retail would add miles to Reliance’s retail run-up.

It is the third investment in Reliance Retail from global investors. Earlier in September, Silver Lake and KKR, a US buy-out firm, collectively invested ₹13,050 crores in RRVL.

Commenting on the latest collaboration, Bill Ford, CEO General Atlantic, said that his company shares the foundational belief of Reliance to foster transformative growth through technology enablement. He feels that Reliance’s retail drive will bring more positive changes to the current retail ecosystem of the country. Ambani also spoke in the same line in welcoming General Atlantic as its retail partner.

General Atlantic-Reliance Retail Deal: Key Points

• It is the second investment of General Atlantic in Reliance platform. Earlier in 2020, the US private equity investor invested Rs6,598.38 crores in Jio platform
• General Atlantic will make Rs 3,675 crores investment in RRVL for 0.84 percent stakes
• Reliance Retail has already received Rs 5,500 crores and Rs 7,500 crores investments from KKR and Silver Lake Partners respectively
• The investors together invested a total of Rs 13,050 crores for 1.75 and 1.28 percent stakes in Reliance Retail
• Pre-money equality valuation of RRVL currently stands at Rs 4.21 lakh crores
• Morgan Stanley is acting as the advisor for Reliance Retail in the deal, and Cyril Amarchand Mangaldas and Davis Polk & Wardell as legal counsels
• Shardul Amarchand Mangaldas & Co and Paul, Weiss, Rifkind, Wharton & Garrison LLP appointed as their legal counsels by General Atlantic

Conclusion

Reliance is already India’s largest retailer with roughly 12,000 stores country-wide, now looking at expanding its e-commerce footprint in India’s growing retail space.