Singapore’s GIC and TPG to invest over $1 billion in Reliance Retail
GIC, Singapore's sovereign wealth fund, will invest $752 million in Mukesh Ambani's Reliance Retail, and TPG will invest $250 million in the Indian firm, they all said Saturday midnight (local time).
The Government of Singapore Investment Corp and TPG are the latest high-profile investors to back Reliance Retail, India's largest retail chain, in the past four weeks. Reliance Retail - like its sister sibling Jio Platforms - is a subsidiary of Reliance Industries, India's most valuable firm.
GIC and TPG's investments give Reliance Retail a pre-money valuation of $58.5 billion, the Indian firm said. GIC, which has backed firms in more than 40 nations, will get a 1.22% equity stake in the retail giant, while TPG will secure a 0.41% stake, they said.
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The announcement today caps a busy week for Reliance Retail, which in the past three days has revealed that Mubadala ($855 million for a 1.4% stake), Silver Lake ($254 million for a 0.38% stake) and General Atlantic ($498 million for a 0.84% stake) would also be investing.
In total, investors have committed about $4.4 billion in Reliance Retail in the current fundraising spree.
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Reliance Retail, founded in 2006, serves more than 3.5 million customers each week (as of early this year) through its nearly 12,000 physical stores in more than 6,500 cities and towns in the country. Physical retail commands about 97% of all retail sales in India, according to estimates from several research firms.
We believe Reliance Retail will continue to use its extensive supply chain and store networks, as well as strong logistics and data infrastructure, to add value to its customers and shareholders," said Lim Chow Kiat, CEO of GIC, in a statement.
Reliance Retail operates supermarkets, electronics chain, fashion outlets and a cash-and-carry wholesaler. In recent months, the firm has rushed to widen its dominance in the retail market. It bought several parts of Future Group, India's second largest retail chain, for $3.4 billion in late August.
Late last year, it also entered the e-commerce space with JioMart. JioMart, a joint venture between Reliance Retail and Jio Platforms, has presence in over 200 Indian cities and towns, and maintains a partnership with Facebook for WhatsApp integration.
Facebook, which invested $5.7 billion in Jio Platforms earlier this year, has said it will explore various ways to work with Reliance to digitize the nation's 60 million mom and pop stores as well as other small and medium-sized businesses.
Jio Platforms has raised more than $20 billion in India this year from a roster of marquee investors, including Facebook, Google, General Atlantic, Mubadala, Silver Lake and KKR. Some industry executives have argued that investments in Jio Platforms make no business case and is largely foreign firms' push to get friendly with Ambani, India's richest man and an ally of Prime Minister Narendra Modi.
I am delighted that GIC, with its track record of close to four decades of successful long-term value investing across the world, is partnering with Reliance Retail in its mission to transform the Indian retail landscape. GIC's global network and track record of long-term partnerships will be invaluable to the transformation story of Indian Retail. This investment is a strong endorsement of our strategy and India's potential," said Mukesh Ambani, chairman and managing director of Reliance Industries, in a statement.
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The story was updated at 2:15 am IST to include details about TPG's investment.