Reliance's retail arm raises $3.4bn in single week
MUMBAI -- Reliance Retail Ventures, run by India's richest man, Reliance Industries' Mukesh Ambani, has raised roughly 248.9 billion rupees ($3.39 billion) in just one week from prominent global investors, which will allow the company to launch an assault on rivals such as Walmart-owned e-commerce company Flipkart of India and Amazon.
The investments from GIC, TPG, Silver Lake, KKR and others equip Reliance Retail with funds to compete in the Indian market, in both offline and online formats. Reliance Industries has shed a 7.28% stake in its retail arm for 321.97 billion rupees since Sept. 9, and comes as the country's retail sector prepares for the upcoming festival season.
The new funding comes less than a month after Reliance Industries said it would acquire Indian retail pioneer Future Group's main units for 247 billion rupees through Reliance Retail.
It also follows Reliance's huge fundraising drive this year for Jio Platforms, the group's telecom and digital services company, which brought in $20 billion from investors such as Facebook, Intel and Google. The Indian conglomerate intends to divest minority stakes in its digital and retail businesses, and hold initial public offerings for each within five years.
Two upcoming Indian festivals, Navratri at the end of this month and Diwali in mid-November, are major events for retailers, with active purchasing by shoppers looking for clothes, electronics and even passenger vehicles. Companies respond to the spike in demand with heavy discounts and the launch of new products.
San Francisco-headquartered private equity firm TPG, the latest company to pump money into Reliance Retail, is investing 18.37 billion rupees for a 0.41% stake. That investment puts Reliance Retail at an equity value of 4.28 trillion rupees, Reliance said in a statement on Oct.3.