Can you tell me about the latest stake buy in Reliance Retail by Silver Lake Partners?

In December 2019, Reliance Retail was valued at $34 billion owing to a share swap scheme that had helped its shareholders monetise their investment. Stock owners were given an offer whereby they can exchange four shares of Reliance Retail for one of its parent company Reliance Industries Ltd (RIL). 9 months later, the company sold stake to Silver Lake valuing the company at $58 billion, a jump of $24 billion or 70 percent in valuations in less than 1 year.

Silver Lake has agreed to invest Rs.7500 crore in Reliance Retail Ventures Limited or around $1.1 billion. In turn, Silver Lake will get a 1.75% stake in the retail venture of Reliance. It may be recollected that RRVL had recent acquired most of Future Enterprises for $3.8 billion.

The above stake by Silver Lake assigns a valuation of Rs.428,500 crore for Reliance Retail or translating into $58 billion. So now we have the O2C business at around $75 bn, Jio Digital at $65 billion and Retail at $58 billion as the 3 pillars of RIL.

Interestingly, this marks the second major billion dollar investment the Reliance Group. In the previous quarter, Silver Lake had invested $1.4 billion in Jio Platforms. Just last week, Silver Lake also bought a sizable stake in Byju’s.