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Carlyle might invest up to USD 2 billion in Reliance Retail

Last week, Reliance Retail landed a USD 1 billion check from Silicon Valley-based venture capital firm Silver Lake for a 1.75% stake.

American private equity firm The Carlyle Group is eyeing a USD 1.5 to 2 billion worth of stake in Reliance Retail, the retail arm of Reliance Industries, India’s largest company by market capitalization.

Carlyle is still discussing the investment details with Reliance, local media Mint said, citing two sources aware of the development.

If the deal materializes, it will be Carlyle’s first investment in the retail sector in India and its biggest so far in an Indian company, the report added.

This makes Carlyle the latest investor willing to join Reliance Retail’s cap table.

Last week, the Mumbai-headquartered conglomerate landed a USD 1 billion check from Silicon Valley-based venture capital firm Silver Lake for a 1.75% stake in Reliance Retail.

New York-headquartered investment firm KKR is also reportedly looking to invest USD 1.5 billion for a 2.32% stake in Reliance Retail. Meanwhile, sovereign wealth funds of Emirates of Abu Dhabi including the Abu Dhabi Investment Authority (ADIA) and Saudi Arabia’s Public Investment Fund (PIF) are also in talks to write checks for Reliance Retail.

Startup

Read this: A brief history of Reliance’s digital venture, Jio Platforms

According to a report by Financial Times, ADIA is in discussions for an investment of about USD 750 million at a valuation of roughly USD 57 billion, while PIF could buy a stake worth as much as USD 1.5 billion. Mubadala may also take a stake, the report added.

It is to be noted that, except for Carlyle, Silver Lake, KKR, ADIA, and PIF are all investors in Jio Platforms, the digital arm of Reliance, which raised over USD 20 billion in funding from 13 high-profile global investors including American tech behemoths Facebook and Google earlier this year.

The common factor between Jio Platforms and Reliance Retail is Ambani’s ambitious e-commence venture JioMart. Reliance rolled out JioMart, a joint venture between Reliance Retail and Jio Platforms in 200 cities earlier in May to take on e-tailers Amazon India and Walmart-owned Flipkart.

Furthermore, a Bloomberg report last week said, Reliance Industries is reportedly speaking with Amazon.com, Inc. to sell about USD 20 billion-stake in its retail arm. However, a source at Reliance has denied the speculation, as per wire agency AFP.

Founded in 2006 by Mukesh Ambani, chairman and managing director of Reliance Industries and Asia’s richest person, Reliance Retail operates India’s largest and fastest-growing retail business with nearly 12,000 stores nationwide with close to 640 million annual footfalls. For the year ended March 31, 2020, Reliance Retail reported a net profit of USD 726.4 million on the back of a consolidated turnover of USD 21.7 billion.

Late last month, it acquired the retail and wholesale business as well as the logistics and warehousing business of the Indian conglomerate, Future Group for USD 3.35 billion.

Carlyle is considering investments across the retail space in India comprising both online and offline retail firms, including Reliance Retail, one of the sources told Mint.