New Delhi: After Reliance Jio, now Silver Lake is going to buy a big stake in Reliance Retail. The private equity firm will buy a 1.75 percent stake for Rs 7500 crore. Earlier, American equity firm Silver Lake also bought a 2.08 percent stake in Jio Platforms. Let us know that Reliance Retail Ventures Limited (RRVL), a subsidiary company of Reliance Industries, is going to acquire the retail and wholesale business and logistics and warehousing business of Future Group. This will give Reliance Future Group access to over 1,800 stores of Big Bazaar, EGDAY and FBB, spread across 420 cities in the country. This deal has been finalized in 24713 crores.
Deal for Rs 7500 crore – The world’s largest tech investor company Silver Lake Partners (SLP) will invest Rs 7500 crore in Reliance Retail. For this, the valuation of Reliance Retail has been fixed at Rs 4.21 lakh crore.
Reliance-Retail, the king of the retail market, is already the largest company in the electronics, FMCG, and apparel sectors with sales of Rs 1,62,936 crore. After adding Rs 30,000 crore of revenue to Future Group, the sales of Reliance Retail will reach Rs 1,93,000 crore. In this way, its share in the organized retail market of the country will be 30 percent. The country’s retail business is worth $ 89 billion.
Pankaj Jajoo, the founder of Metta Capital Advisors, who advised the Future Group in the deal, told ET that this is an unprecedented transaction, as it is the largest consolidation exercise in the country’s retail sector. This includes many companies connected to different segments of the retail value chain. This is good for the ecosystem, as a business is going strong. This is happening at the right time because the sector has been affected by Corona.
The retail category will also have 53 million sq ft of space under Reliance-Future’s network of 13,600 stores. This is more than the total area of all the companies listed in the retail segment. Abneesh Roy, Senior Vice President, Edelweiss Securities, told Economics Time that Reliance’s share in Modern Retail in India will be higher than Walmart’s share in the US market. Apparel retailing is still divided, but this deal will help this low-margin business sourcing and selling products at good prices.
According to Eurometer, the size of the retail business in India is about 42 lakh crore rupees. The ratio of grocery and other things in it is 59:41. Other items include apparel, footwear, and electronics. Reliance Retail has around 800 stores in the grocery segment. This is just 7 percent of its total store network, but it has a 20 percent share in the total sales of Rs 34,600 crore.
Reliance’s grocery retail business will double Avenue Supermart by adding an annual revenue of Rs 22,000 crore from 1350 supermarkets of Future Retail. Avenue Supermart runs a retail store network called Dmart. Its sales in the last financial year were Rs 24,675 crore.
