The Rs 7,500-crore investment by private equity (PE) firm Silver Lake in Reliance Retail and a likely Rs 11,000-crore investment by KKR in the coming weeks, sets the stage for more stake sales by the company, informed sources have told Business Standard.
Reliance Retail has given the option to investors in Jio Platforms to consider backing the former as it unlocks value, following the acquisition of Future group retail assets last week, persons in the know said.
Investors such as Abu Dhabi Investment Authority and Mubadala could be next in line, though a Reliance spokesperson said it could not comment on market speculation.
"As a policy we do not comment on media speculation and rumours. Our company evaluates various opportunities on an ongoing basis. We have made and will continue to make necessary disclosures in compliance with our obligations under SEBI and our agreements with the stock exchanges," the spokesperson said.
However, persons in the know said that Reliance Retail could look at offloading about 25-30 per cent stake to a combination of private equity firms and tech giants such as Facebook, Google and Intel, presenting telecom and retail as a "potent force" in India's consumption story.
Along with Jio, retail contributes 35 per cent to RIL's consolidated EBITDA, company chairman Mukesh Ambani had said at the firm's annual general meeting in July.
Reliance had offloaded nearly 33 per cent stake in Jio Platforms to 14 investors for Rs 1.52 trillion between April and June, emerging as the only firm in the country to trigger a massive monetisation exercise at the height of the lockdown.
"We will induct global partners and investors into Reliance Retail in the next few quarters," Ambani, 63, had said at the AGM, saying that his firm was also scaling up JioMart, its new commerce venture.
JioMart, which went live across 200 cities in May, had crossed 250,000 in daily orders, with the number growing each day, Ambani said. Since then, daily orders have crossed the 400,000-mark, sector experts said.
While the average order value on JioMart, according to analysts, is pegged at Rs 500 per transaction, Ambani is looking to raise this number by taking the platform into areas beyond grocery including categories such as electronics, fashion, pharma and healthcare. The company would also deepen its ties with Whatsapp, which is owned by Facebook, to boost the reach of JioMart.
WhatsApp’s user base of over 400 million users in India will help accelerate the adoption of JioMart, Ambani said.
The need to work "closely" with WhatsApp also comes as Amazon and Walmart-backed Flipkart ramp up their grocery services in the country. Both Amazon and Flipkart have been wooing kiranas aggressively in the last few months, giving the latter an additional avenue to reach consumers and do business.
Apart from kiranas and small merchants, Reliance Retail would also look to work closely with farmers to source more food items from them, as it sought to scale up its farm-to-fork operations.
"We sell more fruits and vegetables than any other organised retailer in the country. The bond with tens of thousands of farmers has helped us source over 80 percent of our fresh fruits and vegetable directly from farmers," Ambani said.
At the same time, Reliance Retail would continue to push its presence into small towns and cities, Ambani said, adding more outlets in these places.
"More than two-thirds of our nearly 12,000 stores are operating in Tier II, III and IV towns and we will continue to keep our attention there," he said.
With the addition of Future group stores, the number of outlets under Reliance Retail will now go up to over 13,500 stores, giving it control over a third of the organised retail market in India.
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