General Atlantic Comes Calling On Asia’s Richest Man’s Retail Business

U.S. private equity firm General Atlantic will invest 36.75 billion rupees ($498 million) in the retail business of Mukesh Ambani’s Reliance Industries, the company announced Wednesday.

General Atlantic will buy a 0.84% stake in Reliance Retail, and its investment comes days after the retail business received around $1.8 billion in investments from Silver Lake Partners and KKR.

The investment values Reliance Retail at 4.28 trillion rupees ($58 billion), marginally higher than the previous valuation of 4.21 trillion rupees, and is the second investment for the fund in Reliance after it picked up a 1.34% stake in its tech and telecoms business Jio Platforms for 65.98 billion rupees in May.

Ambani, who is chairman and managing director of Reliance Industries and has a net worth of $86.5 billion, said he was “pleased” to extend the group’s relationship with General Atlantic as it works towards “empowering both merchants and consumers.”

(Disclosure: Reliance Industries owns Network18, which publishes Forbes India.)

General Atlantic CEO Bill Ford said the fund was “thrilled to be backing Mukesh’s New Commerce mission to drive substantial positive change in the country’s retail sector,” and was “excited by the immense potential of the full Reliance ecosystem.”

In May, Reliance launched JioMart, an online grocery service meant to compete with the likes of Amazon and Walmart-owned Flipkart and others in the business and is often referred to as “new commerce.” Amazon, too, is reportedly in talks to pick up a $20 billion stake in the retail business. (In comparison, billionaire Radhakishan Damani’s highly successful Avenue Supermarts, which runs DMart chain of stores, has a market cap of about $19 billion.)

Reliance Retail, which was started in 2007, netted $726 million on revenue of $21.7 billion for financial year ending March.

India’s retail market is estimated to be valued at $825 billion in total sales (at pre-Covid-19 levels) of which 12% or barely $100 billion comes from the so-called organized sector which includes e-commerce companies as well as the neighborhood stores that throng the country, according to retail consultancy Technopak.

General Atlantic’s investment in the retail business comes weeks after Reliance sold 33% in Jio to a slew of global investors including Facebook, Google and private equity firms, among others, raising $20.2 billion in less than three months.

Ambani has recently been focused on his retail business. In late August, Reliance announced it would buy retail pioneer Kishore Biyani’s Future Group for $3.3 billion. Biyani, with his family, was among the country’s richest in 2019.