India’s Reliance Industries Ltd has approached investors in its digital business about potentially buying stakes in its retail arm, two sources with direct knowledge of the matter said on Thursday.
The oil-to-telecoms conglomerate is looking to attract more investors to Reliance Retail as the business expands rapidly online to take on the likes of Walmart Inc’s Flipkart and Amazon.com Inc’s Indian arm.
Mukesh Ambani, Chairman and Managing Director of Reliance Industries, attends the company’s annual general meeting in Mumbai, India. (Reuters)
Mumbai-based Reliance has approached some investors from that deal to take stakes in the retail business, although “it is understood not all will participate”, one of the sources told Reuters, asking not to be named as talks are private.
The sources did not specifically name which companies Reliance had approached.
Shoppers in the chilled foods section of a Reliance Fresh supermarket in Mumbai. (Reuters)
Reuters could not independently verify whether Amazon and Reliance were in fresh discussions.
Last year, Reuters reported that Amazon had been mulling a proposal to purchase an up to a 26 percent stake in Reliance Retail. Earlier this year, the Economic Times reported that Amazon was in talks to buy a 9.9 percent stake in Reliance Retail.
Amazon did not respond to a Reuters request for comment.
Reliance said it did not comment on speculation and rumors, adding it “evaluates various opportunities on an ongoing basis.”
Shares in Reliance rose as much as 8.5 percent on Thursday, making it the first listed Indian firm to achieve a market capitalization of more than $200 billion.
Ambani, the world’s fifth richest man, is shifting his empire’s focus towards retail after successfully building India’s largest telecom network by customers in four years, hoping to take a dominant position as India’s huge consumer market comes of age.
For Reliance, a deal with Amazon could potentially leverage the e-commerce giant’s global experience in technology, supply chain and logistics, as it aims to connect mom-and-pop stores across India digitally through its Jio telecoms network.
For Amazon, a stake in Reliance Retail could give it access to the Jio telecoms platform and its vast retail footprint across India. It could also add more firepower to Amazon’s local lobbying efforts, as the Ambani family is well-connected.
The reported discussions come at a time when Amazon has been facing tighter regulatory scrutiny and anti-trust cases in India, with brick-and-mortar retailers alleging it uses unfair business practices to operate its online marketplace in the country, an allegation Amazon denies.