American private equity firm Silver Lake will invest ₹7,500 crore in Reliance Retail (US$1.01 billion), the latter said on Wednesday. This is Silver Lake’s second big investment into Reliance, after its US$1.35 billion (₹10,202.55 crore) investment into Jio Platforms. This also comes barely one day after Silver Lake also invested in the ed-tech company Byju’s. With this investment, Reliance Retail may begin its own marathon run of investments over the coming days, like Jio Platforms — just this first investment alone exceeds the value of Reliance Retail’s ₹5,448 crore net profit in FY2019-20.
Investment follows Future retail biz acquisition
This investment comes shortly after Reliance Retail’s announcement that it was acquiring the Future Group’s retail, wholesale, logistics and warehousing businesses for Rs 24,713 crore. Reliance Retail is now setting its sights on kirana stores and home delivery, efforts that it says Silver Lake’s investment will bolster. “Reliance Retail, through its New Commerce strategy, has started a transformational digitalization [sic] of small and unorganised merchants and is committed to expanding the network to over 20 million of these merchants, helping them benefit from the use of technology tools and efficient supply chain infrastructure,” the company said in its press release announcing the investment.
On the latter front, Reliance is beta testing JioMart, which is working with the conglomerate’s own retail presence as well as with partnered kirana stores for delivery. Reliance likely wants to saturate its physical commerce streams and become a sizable player in the e-commerce stream, both of which will be gargantuan undertakings if they are to succeed in both tier-1 cities and small towns.