KKR to invest US$754 million in Mukesh Ambani's retail unit

KKR & Co will hold a 1.28 per cent stake in Reliance Retail Ventures.
KKR & Co will hold a 1.28 per cent stake in Reliance Retail Ventures.PHOTO: REUTERS

MUMBAI (BLOOMBERG) - KKR & Co will buy a US$754 million (S$1.03 billion) stake in Mukesh Ambani's retail business as the Indian billionaire extends his fundraising spree that netted more than US$20 billion for this technology venture this year.

The US private equity group will hold a 1.28 per cent stake in Reliance Retail Ventures, valuing India's biggest retailer at 4.2 trillion rupees (S$78 billion), the Mumbai-based group said in a statement on Wednesday (Sept 23). The deal follows Silver Lake Partners' US$1 billion investment earlier this month in the retail unit controlled by Mr Ambani's refining-to-telecom conglomerate, Reliance Industries Ltd.

Mr Ambani, 63, has turned his attention to the retail business in a bet on India's billion-plus consumers as smartphones and the internet transform the way they shop and access services from education to health care. In the midst of the coronavirus pandemic, Jio Platforms, Reliance's digital unit, sold a combined 33 per cent stake to investors including Facebook, Google and Intel this year.

Like Silver Lake, KKR is a repeat investor in Reliance's consumer sector companies as Mr Ambani seeks to pivot away from the energy businesses he inherited from his father, who died in 2002.

While Silver Lake paid US$1.35 billion for a stake in Jio Platforms, KKR invested US$1.5 billion in Reliance's telecommunications and digital services arm.

Reliance is said to have offered a US$20 billion stake in its retail unit to Amazon.com, a person familiar with the matter said this month. If successful, this would be the biggest ever deal for the American etailer as well as India.

Reliance Retail 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's success in luring investors to Jio Platforms and now his retail business has boosted his personal wealth. As shares of Reliance Industries rallied 47 per cent this year, he has added about US$26 billion to his net worth. With a fortune of US$84.7 billion, he is now the world's fifth-richest person, according to the Bloomberg Billionaires Index.