Amazon in talks with Reliance to invest $20 billion in retail venture

After global giants put $20 billion in Reliance Industries’ (RIL) digital arm Jio Platforms, they are now eyeing a stake in the retail venture  of Asia’s richest man Mukesh Ambani’s oil-to-telecom conglomerate.

A day after Silver Lake announced it will put about $1 billion in RIL’s retail business and reports said KKR was in talks to pick up some stake for about $1.5, online retail giant Amazon is said to be in talks to invest in Reliance Retail Venture.

RIL could sell up to 40% stake in the retail arm to Amazon for up to $20 billion, Bloomberg reported quoting a person who is aware of the negotiations.

Reliance shares hit record highs on Thursday, trading at ₹2,314 each towards the end of trading on the NSE on Thursday.

Media reports have suggested that Ambani is planning to scale up his retail business to take on even online rivals Amazon and Walmart-run Flipkart in India.  It recently acquired the retail assets of Kishore Biyani-promoted Future Group for ₹24,700 crore.

If the Amazon-RIL deal fructifies, then Reliance Retail would get a greater online presence, while Amazon could benefit from the physical outlets owned by RIL.

Amazon refused to comment, while a Reliance spokesperson said, “As a policy, we do not comment on media speculation and rumors,” Bloomberg reported. “Our company evaluates various opportunities on an ongoing basis. We have made and will continue to make necessary disclosures in compliance with our obligations.”

Related news: After Silver Lake, PE firm KKR to invest $1 billion in Reliance Retail

Facebook and Google were among the big global names that led funding of $20 billion in Jio Platforms Ltd.

Reliance Retail, the largest retailer in India by revenue, runs about 12,000 physical outlets in 7,000 towns that sell fruits, vegetables and groceries, consumer electronics, apparel and footwear and jewellery. It also has an online grocery store called JioMart..

Its net profit was ₹431 crore for the June quarter, when stores were closed for two months due to the coronavirus outbreak. Its FY20 revenue was ₹1.62 lakh crore, up from ₹1.45 lakh crore the year before.

Related news: Reliance to buy stakes in Future Group for ₹24,713 crore