Indian billionaire Mukesh Ambani led Reliance Industries Ltd. is now offering to sell a roughly $20 billion stake in its retail business Reliance Retail Arm, RRVL to Amazon Inc., as per Bloomberg’s report. The U.S. tech giant is considering investing in Reliance Retail Ventures Ltd., as the Indian conglomerate is willing to sell up to a 40% stake in the retail unit, the report further adds.
However, the talks are said to be in early-stage for now, but Amazon is actively showing interest in this. As every industry giant wants to get a slice of Reliance Retail, the upcoming game-changing e-commerce player in the country.
Amazon and Reliance Retail Arm Deal
If this happens, this will clearly turn Jeff Bezos and Mukesh Ambani from rivals into allies in one of the fastest-growing consumer markets. Bloomberg’s report also suggests that this possible $20 billion deal would be the biggest ever in India as well as for Amazon.
Meanwhile, Reliance Industries shares witness gains and touched an all-time high after these reports come out to the internet. Hence, the stock surged 4.2% as of 12:08 p.m. in Mumbai. Also, the Indian rupee rose as much as 0.5% to 73.1588 per dollar. This is because of the market expectations of more capital inflows.
Is Amazon Preparing For Its Rival, Walmart In India?
There is one more side of this coin, as with this deal Amazon gets its hand on Reliance Retail so that it further gives a more tough competition to its rival Walmart in India. We all know Walmart is actively strengthening its presence after the acquisition of Flipkart in the country. So with this speculated move, Amazon may be trying to get a step ahead in the game.
Since in India, a lot of people still shop in Kirana stores. And after getting its hand on Reliance Retail, Amazon will try to build a more strong on-the-ground presence. For Amazon, Reliance can be a brick-and-mortar component for its online services in the country. Meantime, we want to make it clear that Amazon hasn’t made any final decision yet.
And if we talk about Reliance Retail, then its already running supermarkets, India’s largest consumer electronics chain store, Reliance Digital, cash and carry wholesaler, fast-fashion outlets, and an online grocery store called JioMart. This Reliance Industries’ retail unit operates almost 12,000 stores in nearly 7,000 towns. In the year through March 2020, RRVL reports 1.63 trillion rupees ($22 billion) in revenue.
Meanwhile, on Monday, Indian conglomerate Reliance also confirms that U.S. private equity firm Silver Lake Partners is investing $1.02 billion (₹7,500 crores) in the retail arm, Reliance Retail Ventures Limited (RRVL) of Reliance Industries Ltd for a 1.75% stake. According to reports, KKR is also in talks with Reliance Retail to invest $1 billion into the retail company.