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Carlyle To Invest Up To $2B For Stake In Reliance’s Retail Unit – Report
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Carlyle To Invest Up To $2B For Stake In Reliance’s Retail Unit – Report

Carlyle Group is looking to join a list of firms pouring money into Reliance Industries’ retail unitq, financial daily Mint reported. The private equity firm seeks to invest $1.5 billion-$2 billion to buy a stake in Reliance Retail Ventures Ltd (RRVL), India’s largest retail chain.

If a deal is finalized, it would mark Carlyle’s (CG) first investment in the retail sector in India and its biggest so far in an Indian company. “The retail story (of Reliance Retail) is certainly a bright spot,” Mint cited one of two sources who requested to speak on terms of anonymity as the talks are private.

Carlyle is considering investments across the retail space in India comprising both online and offline retail firms, including Reliance Retail, the person said. A spokesperson for Carlyle declined to comment on the talks with Reliance, according to the report.

A spokesperson for Reliance said in response to the report: “Our company evaluates various opportunities on an ongoing basis. In light of a high incidence of speculative media queries…relating to purported capital transactions …we would like to reiterate that as a policy, we do not comment on media speculation. Vide this communication, we appeal to the media to carefully examine any such speculative information and safeguard themselves and their readers, many of whom are individual retail investors, from publishing/recycling unfounded and/or incorrect news.”

Mukesh Ambani-led Reliance has in recent weeks attracted a lot of investor interest. Last week Bloomberg reported that Reliance was offering to sell a $20 billion stake in its retail arm to Amazon (AMZN). Earlier this month, US private equity firm Silver Lake Partners injected $1.02 billion into the RRVL unit. Silver Lake has already poured $1.35 billion in Reliance’s telecommunications and digital services unit Jio Platforms.

Meanwhile, Carlyle has been investing in the healthcare sector in India. In June, the private equity firm bought a 20% stake in the pharmaceutical business of Indian Piramal Enterprises Ltd. for about $490 million. Earlier this year, it announced a majority stake investment in SeQuent Scientific, the largest Indian pure-play animal healthcare company. Its other investments in the Indian healthcare sector include Medanta Medicity Hospital, a hospital in Delhi, and Metropolis Healthcare, a chain of diagnostic centers and laboratories. Since 2000, Carlyle has invested a total of more than $2.5 billlion in India. (See Carlyle stock analysis on TipRanks)

Shares in Carlyle have plunged 21% this year, while analysts are sidelined on the stock. The Hold consensus shows 6 Hold and 1 Sell versus 2 Buys. That’s with a $29.33 average analyst price target indicating 17% upside potential in the shares in the coming 12 months.

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