From telecom to retail, RIL splurges $3.1 bn in 3 years on acquisitions

Netmeds latest in long list of firms in which it has picked up stakes

With Reliance Industries picking up majority stake in online pharmacy Netmeds, the company has forked out over $3.1 billion in acquisitions in the last three years.  

The nature and size of the deals — over 30 in three years — varies. In some, Reliance has acquired only a minority stake, letting the current management run the company. In others, it has picked up the majority or the entire stake to take over the operations itself. Hence, the deal sizes vary — from as low as $5 million (Genesis Colors) to $603 million, which was spent to buy the majority stake in Hathway.   

The acquisitions were made in areas which are closely related to Reliance's key businesses — telecom, internet, retail, digital, media, education, digital, chemicals and energy.

In an analysis by Goldman Sachs, 80 per cent of the investment was made in the technology and media and entertainment space, while 13 per cent went to retail, and about 6 per cent to energy.

The biggest share of the investment — around $ 1.7 billion — was, of course, in the telecom and internet space. This includes buying Hathway, Den and GTPL’s collectively for over $1 billion — a move aimed at getting access to millions of homes who might subscribe to fibre broadband services.

Reliance has also put in strong bets in the media and education space, with investments of $688 million. 

Here, the big deals include buying out The Indian Film Combine, small stakes in Balaji Telefilms (25 per cent), Eros International (5 per cent), and music app Saavn. The collective bill: $507 million.

These acquisitions are aimed at tapping into over 400 million mobile customers with a range of content and OTT platforms to choose from.     

Netmeds is not Reliance’s first investment in the healthcare segment. It has also bought a majority stake in C-Square for $11 million. 

C-Square offers software to distributers and retailers in the pharmaceutical sector and handles over 1 million transactions daily.

To build scale, Reliance has also invested in the retail sector — to the tune of $404 million, according to Morgan Stanley. It has picked up stakes in Genesis Color, which sells international brands, and bought out toy giant Hamleys, Rhea Retail, which sells products for children and expectant mothers, and online shopping company Infibeam. 

Sources say one of Reliance’s major coups could be the acquisition of the Future group, with its brands across grocery, lifestyle amongst others, for which negotiations are currently on.