On Wednesday, Reliance Industries Limited (RIL) in a stock exchange filing said that Silver Lake will invest Rs 7,500 crore into Reliance Retail Ventures Limited (RRVL), a subsidiary of Reliance Industries.
"This investment values RRVL at a pre-money equity value of Rs 4.21 lakh crore. Silver Lake's investment will translate into a 1.75% equity stake in RRVL on a fully diluted basis," the statement added.
Shares of RIL rose as much as 1.5 percent to Rs 2,139, post the announcement, its third straight day of gains.
This is the second billion-dollar investment by the American private equity firm in a RIL subsidiary after the $1.35 billion investment in Jio Platforms announced earlier this year.
"We believe technology will be key to bringing the much-needed transformation in this sector so that various constituents of the retail ecosystem can collaborate to build inclusive growth platforms. Silver Lake will be an invaluable partner in implementing our vision for Indian Retail," said RIL's Chairman and MD Mukesh Ambani.
"The success of JioMart in such a short time span, especially while India, along with the rest of the world, battles the COVID-19 pandemic, is truly unprecedented, and the most exciting growth phase has just begun. Reliance's New Commerce strategy could become the disruptor of this decade. We are thrilled to have been invited to partner with Reliance in their mission for Indian Retail," said Egon Durban, Co-CEO and Managing Partner of Silver Lake.
The transaction is subject to regulatory and other customary approvals, the statement added.
For the said deal Morgan Stanley acted as financial advisor to Reliance Retail and Cyril Amarchand Mangaldas and Davis Polk & Wardwell were the legal counsels. For Silver Lake, Latham & Watkins and Shardul Amarchand Mangaldas & Co were the legal counsels.
Last week, the Financial Times citing two senior industry executives said that the Mukesh Ambani-led conglomerate is looking to raise funds by selling minority stakes in Reliance Retail and is in discussion with several investors.
A Bloomberg report now says that KKR is in advanced talks to invest at least $1 billion in the retail business.