KKR invests 5.500 billion rupees in Reliance Retail - here's why

Reliance Retail Ventures Limited was widely predicted to continue the business plan that had worked so well for Jio Platforms in terms of attracting big-name investors. On a related note, after raising €1.08 billion (Rs 11.367 crore) from Silver Lake earlier this month, Reliance Retail today announced that global investment firm KKR will contribute Rs 5.550 crore.

This investment values ​​Reliance Retail at a pre-money equity value of Rs 4.21 lakh crore. KKR's investment will result in a 1,28% stake in Reliance Retail.

Again, as had been widely assumed, companies that have invested in Jio Platforms are the ones that are investing again in Reliance Retail. KKR had pumped €1.5 billion (Rs 11,367 crore) into Jio Platforms earlier this year.

KKR deepens connection with India

In a press release, Mukesh Ambani, Chairman and CEO, Reliance Industries, said, “I am pleased to welcome KKR as an investor in Reliance Retail Ventures as we continue our journey towards growing and transforming the Indian retail ecosystem for the benefit of all Indians. KKR has a proven track record as a valued partner for advanced franchising and has been involved in India for many years.

Henry Kravis, Co-Founder and Co-CEO of KKR, said, “We are delighted to deepen our relationship with Reliance Industries through this investment in Reliance Retail Ventures, which is empowering merchants of all sizes and fundamentally changing the retail experience for Indian consumers. Reliance Retail’s new commerce platform addresses an important need for consumers and small businesses as more Indian consumers turn to online shopping and the company is offering tools to make Kiranas an essential part of the value chain.”

Founded in 1976, KKR has €222 billion in assets. It has invested in, among others, Epic Games, OutSystems, Internet Brands, Go-jek and Voyager Innovations. KKR has approximately €5.1 billion in private equity investments in over 15 Indian companies, including Jio Platforms, JB Chemicals, Max Healthcare, Eurokids International and Ramky Enviro Engineers.

Is Reliance Retail a monopoly?

Reliance Retail, which took over the retail businesses of Kishore Biyani-led Future Group in August, will help it dominate the industry it aims to dominate through a two-pronged strategy.

The first is, of course, Reliance Retail’s physical stores. Reliance Retail has nearly 640 million footfalls across its 12,000 stores across the country.

The second part of the strategy is to support Jio Mart, Reliance Group's e-commerce platform that has been launched for 200 cities in India.

Jio Mart is positioned to take on Walmart-backed Flipkart and fellow corporate giant Amazon.

Jio Mart, in addition to utilizing the inventory of Kirana stores in each neighborhood, hopes to leverage the massive infrastructure that Reliance Retail is building.

Reliance Retail empowers retailers to leverage technology tools and create an efficient supply chain infrastructure to help deliver a superior value proposition to customers.