On Wednesday, in a statement India’s Reliance Industries Ltd said, U.S. private equity firm Silver Lake Partners will invest $1.02 billion in its retail business.
The development sets the stage for a three-way battle between a battle Reliance, Amazon.com Inc and Walmart Inc. All three are wooing India’s middle class, most of whom are new to online purchases of groceries and food.
In May 2020, Reliance launched its online grocery service JioMart, which has been aggressively building its retail presence through acquisitions, moving beyond its mainstay oil and gas business.
Following its purchase, Silver Lake will gain a 1.75% stake in Reliance Retail, giving the business a pre-money equity value of $57.14 billion (4.21 trillion rupees), said Reliance.
“The real competition is going to be between Amazon, Walmart and Reliance,” said Harminder Sahni of retail consultancy Wazir Advisors. “Walmart is self-funded and Amazon is too, so the company to bet on now is Reliance.”
Silver Lake, whose portfolio includes stakes in Twitter Inc and Airbnb, has previously invested in Reliance’s digital business as part of a funding round that saw the Indian giant raise more than $20 billion from investors including Alphabet Inc’s Google and Facebook Inc.
According to a report from Bloomberg which cites sources familiar with the matter at hand, KKR & Co Inc, is also in advanced talks to invest at least $1 billion in Reliance Retail.
($1 = 73.6850 Indian rupees)