As per the reports, Reliance Industries Ltd. is offering to sell a stake in the retail for $20 billion to Amazon Inc. As per Bloomberg’s data, it will be the biggest deal for Amazon and India ever. Reliance share rose by 4.2% as the speculation hit the markets.
Earlier Facebook and Google too invested in stakes of Jio Platforms Ltd. which is the tech venture of the company through which $20 billion was raised.
What is Reliance planning?
Reliance, after conquering the telecom market in India in just 4 years is now showing interest in retail. Recently, Reliance acquired a retail arm in Future Group and a $1 billion investment from Silver Lake Partners.
It is speculated that the retail plan to be in India set up is similar to China’s Alibaba Group Holding Ltd. There have been reports of U.S. private equity firm KKR & Co. and L Catterton planning to invest in Reliance.
“The deal would be a highly complementary one that builds on the strengths of either side,” stated Utkarsh Sinha, Managing Director, Bexley Advisors. He further added, “Amazon comes with the might of its warehousing capabilities and the ability to streamline supply chains and sweat assets for maximum returns.” He also warned of “potential unintended consequences” once the deal succeeded. He voiced, “It is not inconceivable that this stifles any other entity from gaining scale in Indian retail space,” he said.
Reliance’s take on the reports…
“As a policy, we do not comment on media speculation and rumors,” a Reliance spokesman mentioned in an emailed response to Bloomberg News. Further, they added, “Our company evaluates various opportunities on an ongoing basis. We have made and will continue to make necessary disclosures in compliance with our obligations.”
More about Reliance Retail
Reliance Retail currently runs around 11,784 stores out of which 797 spans over 180 cities in the grocery space. It is the largest retailer in terms of revenue in India. The retail outlets offer foods, groceries, apparel and footwear, lifestyle and home improvement products, electronic goods, and farm implements and inputs.
Reliance Retail operates Reliance Fresh, Reliance Smart, and Reliance Market stores. In the electronics space, Reliance Retail operates Reliance Digital, Reliance Digital Express Mini stores, and Jio stores. In the fashion and lifestyle space, it operates Reliance Trends, Trends Women, Trends Man, Trends junior, Project Eve, Reliance Footprint, Reliance Jewels, and AJIO.com.
Reliance Retail is committed to “bettering the lives” and has worked on making socio-economic changes and looks forward to bringing a revolution to the retail market in India.