RIL in talks to sell $1 bln Reliance Retail stake to Silver Lake; Ambani cashing in retail after Jio?

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Updated: Sep 04, 2020 12:50 PM

Mukesh Ambani’s Reliance Industries Ltd (RIL) is India’s largest private listed company with a market capitalization of Rs 13.91 lakh crore (about $189 billion).

impact of Reliance Retail-Future Group Deal in india's retail industry, how reliance will get benefited, mukesh ambani, kishor biyaniEarlier this year, Silver Lake bought a total of 2.08% equity stake in RIL’s telecom and digital services unit Reliance Jio for Rs 10,202 crore.

Mukesh Ambani’s Reliance Industries is in talks to sell equity stake worth $1 billion in Reliance Retail to US-based private equity firm Silver Lake, in a deal that could value Reliance Retail at $57 billion, the Financial Times reported citing unidentified sources. FT reported that Mukesh Ambani is looking to raise $5.7 billion from investors by selling a 10% stake in Reliance Retail. Earlier this year, Silver Lake bought a total of 2.08% equity stake in RIL’s telecom and digital services unit Reliance Jio for Rs 10,202 crore. RIL ended up selling a total of 32.97% stake in Reliance Jio Platforms for Rs 1.52 lakh crore to 13 investors, Facebook, Google, Qualcomm, KKR, and more.

Mukesh Ambani’s Reliance Industries Ltd (RIL) is India’s largest private listed company with a market capitalization of Rs 13.91 lakh crore (about $189 billion). Silver Lake’s investments in Jio Platforms valued it at about $66 billion. Silver Lake’s investment in Reliance Retail at a valuation of $57 billion would take the combined valuation of Jio Platforms and Reliance Retail to $123 billion. Reliance Retail had a total turnover of Rs 162,936 crore and a net profit of Rs 5,448 crore at the end of the previous fiscal year.

According to market participants, Mukesh Ambani has been working to pose RIL as a technology and retail play as its traditional cash cow, the oil-to-chemical business witnesses a slowdown owing to the global pandemic.

The company last week acquired Kishore Biyani’s Future Group’s retail, logistics, warehousing and wholesale businesses in a slump sale worth Rs 24,713 crore. With the recent acquisition of Kishore Buyani’s Future Group business, Mukesh Ambani looks to take on global e-commerce giants such as Amazon, Walmart owned Flipkart. Reliance Retail, with the assets acquired from Future Group has become a leader in India’s retail space, pushing Radhakishan Damani owned Avenue Supermarts to a distant second.

Reliance Retail Spokesperson response: As a policy, we do not comment on media speculation and rumours. Our company evaluates various opportunities on an ongoing basis. We have made and will continue to make necessary disclosures in compliance with our obligations under Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and our agreements with the stock exchanges.”

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