The commercial juggernaut that is India’s Reliance Industries continues to roll forward despite the COVID-19 pandemic, with the FT last week reporting that the Silver Lake Partners private equity firm was discussing the possibility of investing $1bn in the retail arm of billionaire Mukesh Ambani’s energy-to-comms conglomerate. The deal would value Reliance Retail at around $57 billion and, even if it does not come to fruition, it nevertheless simultaneously signals the extent of Ambani’s ambition and the allure of the Indian consumer market to the global investment community; Silver Lakes’s serious expression of interest comes at the end of an intense period that has seen Reliance raise more than $20bn from global investors – including Facebook – by selling stakes in its Jio Platforms digital business.
That $20bn comes on top of the estimated $23bn Ambani reportedly invested in the run-up to the launch of Reliance Jio three and a half years ago. The platform began by offering low-cost, nationwide cellular broadband services and gave tens of millions of Indians – many of them in rural areas – access to the internet for the first time.
Since then, Reliance Jio has also either launched or acquired a wide array of media operations. These include the music streaming service JioSaavn, the on-demand live television service JioTV, and the payments service JioPay. Between them, they boast 388 million customers and Jio additionally owns a 5% minority stake in Eros International, the Bollywood distributor and streaming platform, that last week announced a planner merger with STX Entertainment.
It is the growing convergence between retail and technology that has really caught the attention of the international investment community, however. Since its launch in 2006, Reliance Retail has grown into India’s largest retailer with 3,700 supermarkets, convenience and specialities stores – and it is just about to get bigger. Last month, it announced that it was about to splash out $3.4bn to acquire most of Future Group, whose founder Kishore Biyani has spent more than 30 years building up a network of shops in 400 cities across India. Together, the combined group will own one in three formal shops in the country, a formidable platform as Ambani limbers up for a battle royale with incumbent e-commerce giants including Future Group partner Amazon.