KKR in advanced talks for RM4.2b Reliance Retail stake

(pic: Bloomberg)

NEW DELHI • KKR & Co Inc is in advanced talks to invest at least US$1 billion (RM4.2 billion) in the retail business of Indian billionaire Mukesh Ambani (picture), according to people familiar with the matter, in what could be another US investment in the unit following Silver Lake’s deal.

KKR is in discussions for a stake in Reliance Retail Ventures Ltd, a unit of the largest retailer in India, said the people, who asked not to be identified because the information isn’t public. The private-equity (PE) firm could invest as much as US$1.5 billion and an announcement could come as soon as this month, one of the people said.

Separately, consumer-focused PE firm L Catterton is also considering investing hundreds of millions of dollars in Reliance Retail, one of the people said. Negotiations are ongoing and could be delayed or fall apart, the people said. Representatives for L Catterton, KKR and Reliance Retail didn’t immediately respond to requests for comment. Weeks after Ambani, 63, raised about US$20 billion selling stakes in his technology venture to investors including Facebook Inc and Google LLC, the tycoon is seeking to repeat the same with his retail business. Silver Lake yesterday agreed to invest 75 billion rupees (RM4.5 billion) into Reliance Retail, valuing the business at about 4.2 trillion rupees.

Earlier this year, Silver Lake plowed US$1.35 billion into a stake in Ambani’s Jio Platforms Ltd telecommunications (telco) and digital services unit, while KKR invested US$1.5 billion. L Catterton acquired a US$252 million Jio Platforms stake in June.

Reliance Retail — a unit of the energy-to-telco conglomerate Reliance Industries Ltd — runs supermarkets, India’s largest consumer electronics chain store, a cash and carry wholesaler, fast-fashion outlets and an online grocery store called JioMart. It reported 1.63 trillion rupees in revenue in the year through March 2020. The unit operates almost 12,000 stores in nearly 7,000 towns.

Ambani, the richest man in Asia, is also boosting his grocery and apparel businesses through acquisitions.

Reliance Retail last month said it is buying assets of debt-strapped rival Future Group for 247.1 billion rupees, almost doubling the footprint of its retail chains. The deal includes Future’s retail, wholesale, logistics and warehousing units, Reliance Retail said on Aug 29 in a statement.

Also last month, Reliance Retail acquired a majority equity stake in the digital pharmacy market place Netmeds for 6.2 billion rupees. It is also in negotiations to either buy out or purchase stakes in companies including Urban Ladder, an online furniture seller and Zivame, a lingerie maker, according to people familiar with the matter.

Ambani’s success in luring investors to Jio Platforms and now his retail business has also led to an increase in his personal wealth. As shares of Reliance Industries rallied, he has added about US$22 billion to his net worth this year, advancing his rank among the world’s richest to No 7, according to the Bloomberg Billionaires Index. — Bloomberg