General Atlantic invests $498m in Mukesh Ambani's retail venture

The private equity firm takes a 0.84 per cent stake in Reliance Retail Ventures

Signage for Reliance Digital, a subsidiary of Reliance Industries Ltd., is displayed outside a Reliance Digital store in New Delhi, India, on Monday, Sept. 5, 2016. Reliance Industries today launched their Jio mobile phone service in India, which will offer free voice calling to customers in the world’s second-largest smartphone market, as part of their plan to diversify from the oil and petrochemicals that comprised 95 percent of profit last year. Photographer: Anindito Mukherjee/Bloomberg

US-based private equity firm General Atlantic invested 3,675 crore rupees ($498m) in Indian billionaire Mukesh Ambani's retail venture, helping it continue a fundraising spree to further entrench the company's position in one of the world's fastest growing retail markets.

The deal, which saw General Atlantic take a 0.84 per cent stake in Reliance Retail Ventures, values the company at a pre-money equity value of 4.29 trillion rupees, Reliance Industries said in a stock exchange filing on Wednesday.

"We look forward to leveraging General Atlantic’s extensive expertise at the intersection of technology and consumer businesses, and two decades of experience investing in India, as we create a disruptive new commerce platform to redefine retail in the country,” Mr Ambani, chairman and managing director of Reliance Industries, said.

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

General Atlantic, like other US equity firms such as KKR and Silver Lake, which invested $754m and $1 billion respectively into Reliance Retail earlier this month, is a repeat investor in Mr Ambani's business.

The companies were a part of a group of investors that together pumped close to $20bn into Reliance's Jio Platforms this year.

Asia's richest man is raising funds to digitise the massive retail sector in India even as he consolidates his position by acquiring rival chains.

Last month, Reliance Industries agreed to buy the retail and wholesale business and the logistics and warehousing unit of its rival Future Group in a 247.1bn rupees deal, solidifying its grip on the country's retail sector.

Future Group owns about 2,000 retail stores across 400 cities and towns in India. Its portfolio includes flagship supermarket chain Big Bazaar, apparel stores such as Brand Factory and FBB along with a growing chain of small neighbourhood stores including EasyDay and Heritage Fresh, WH Smith and 7-Eleven.

Earlier this year, Bloomberg reported that e-commerce giant Amazon was in talks to acquire a 20 per cent stake in Reliance Retail.