KKR is increasing its investment in Reliance Retail, which now values India’s largest retail chain at $100 billion following a fresh infusion of $250 million. This move comes shortly after the Qatar Investment Authority injected $1 billion into Mukesh Ambani’s retail empire just last month.
In 2020, the New York-based private equity firm KKR initially invested around $755 million in Reliance Retail when the Indian company was valued at approximately $62 billion. Reliance Retail, a subsidiary of the conglomerate Reliance Industries, boasts a vast network of 18,500 stores and digital commerce platforms in India, offering a wide range of products from electronics and fashion to pharmaceuticals.
This investment coincides with Reliance Retail’s expansion into new product categories, including affordable fast-fashion, and its contemplation of going public. The company has also been actively acquiring and integrating various businesses. In recent years, Reliance Retail has ventured into e-commerce, including a collaboration with Meta’s WhatsApp to sell groceries through the instant messaging app. While Walmart-owned Flipkart and Amazon India currently dominate the local e-commerce market, analysts anticipate that Reliance will eventually surpass both competitors.
Joe Bae, co-chief executive of KKR, expressed his admiration for Reliance Retail’s vision and its efforts to digitally empower retailers across India, as well as its resilience and performance despite the challenges posed by the pandemic and other disruptions.
AllianceBernstein noted earlier this year that Reliance’s robust retail network, extensive mobile infrastructure, digital ecosystem, and advantageous position in a complex regulatory landscape position the Indian conglomerate favorably against online rivals.
JPMorgan analysts also commented that Reliance Industries’ medium-term investment outlook is promising, driven by strong cash flows, the ability to invest in growth businesses, and potential value unlocking through stake sales, IPOs, or listings over the next few years. They anticipate improved operating earnings and a decline in capex for Jio and Retail from FY25 onwards.
Reliance Industries, India’s largest company by market capitalization, has vigorously diversified its portfolio in recent years, expanding into sectors such as telecommunications and on-demand video streaming to reduce its reliance on oil. Isha Ambani, Mukesh Ambani’s daughter, is at the helm of the retail business.
Isha Ambani welcomed KKR’s deepening partnership and expressed her anticipation of benefiting from their global platform, industry expertise, and operational knowledge in their shared mission to transform the Indian retail sector.
It’s worth noting that KKR is also an investor in Jio Platforms, a subsidiary of Reliance Industries, which is overseen by Isha’s brother, Akash Ambani. Last month, Mukesh Ambani’s children were appointed to Reliance’s board, with their father pledging to mentor them over the next five years to take on leadership roles in the company.
