Private equity firm KKR's decision to invest Rs 5,550 crore in Reliance Retail is a bet on not just the company's sprawling retail empire but also its digital promise, KKR's India head Sanjay Nayar said.

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"As India progresses, there is no doubt that there will be a shift from unorganised retail to organised. And Reliance has invested significantly to benefit from this shift. But also, there's a massive digital transformation going on," Nayar told CNBC-TV18 in an interview.

Also read: Private equity major KKR to invest Rs 5,550 cr in Reliance Retail for 1.28% stake

Stating that e-commerce penetration could go from 3 percent to 9 percent in five years, Nayar said that Reliance's aim to digitise kirana shops would be an important factor.

"So it's both a retail and digital play," he said.

Also read: KKR to invest in Reliance Retail: Key things to know about the deal

Nayar, whose KKR is one of the world's leading private equity firms, said that Reliance's digital and retail plays had "miles and years" to go from here and underlined the execution strength of the company.

When asked what the PE firm's target would be in terms of return potential from this investment, possibly through a much-anticipated IPO for the company, Nayar said he was "in for the long haul". "When India's per capita GDP crosses $2,000, you'll see a massive progression in the two trends I talked about. So we'll see where it goes."