Global investment firm KKR will invest Rs 2,069.50 crore in Reliance Retail Ventures Ltd for a 0.25 per cent additional stake of the retailer at a valuation of about Rs 8.36 lakh crore, Reliance Industries Ltd said on Monday.
IMAGE: Isha Ambani’s Reliance Retail Ventures signed a joint venture with Bollywood actor Alia Bhatt’s conscious clothing brand of kids and maternity-wear, Ed-a-Mamma for a 51% majority stake. Photograph: ANI Photo
After this investment, KKR’s shareholding in Reliance Retail Ventures Ltd (RRVL), the holding company of the retail business of billionaire Mukesh Ambani-led RIL, will increase to 1.42 per cent from 1.17 per cent.
The investment is at “a pre-money equity value of Rs 8.361 lakh crore (around $100.87 billion)”, said a joint statement.
The deal placed RRVL “among the top four companies by equity value in the country,” it added.
Last week, RIL received Rs 8,278 crore from Qatar Investment Authority (QIA) for around 1 per cent stake in Reliance Retail Ventures Ltd (RRVL) at a valuation of Rs 8.278 lakh crore ($100 billion).
Now, KKR’s follow-on investment through an affiliate will translate into an additional equity stake of 0.25 per cent in RRVL on a fully diluted basis.
“This, combined with its stake from its investment of Rs 5,550 crore in RRVL in 2020, will take its total equity stake in RRVL to 1.42 per cent on a fully diluted basis,” it added.
RRVL director Isha Mukesh Ambani said: “We highly value our deepening partnership with KKR, and their latest investment in RRVL after their previous investment further reinforces their strong belief in RRVL’s vision and capabilities.”
“We look forward to continued engagement with KKR and to benefit from their global platform, industry knowledge and operational expertise in our journey towards driving the transformation of the Indian retail sector,” she added.
KKR’s investment comes primarily from its Asian Fund IV, and the transaction is subject to regulatory and other customary approvals.
KKR Co-CEO Joe Bae said: “We are pleased to extend our relationship with RRVL.
“Throughout our investment period in Reliance Retail, we have been impressed by the company’s vision and extensive work to empower retailers across India through digitalisation as well as by its resilience and performance in spite of the pandemic and other disruptions.”
Earlier in 2020, RRVL had raised Rs 47,265 crore (around $6.4 billion) from global private equity funds for a 10.09 per cent stake, valuing the company at more than Rs 4.2 lakh crore.
This was the largest fundraising exercise in the sector at that time.
The company had raised funds from Silver Lake, KKR, Mubadala, Abu Dhabi Investment Authority, GIC, TPG, General Atlantic and Saudi Arabia’s Public Investment Fund at a valuation of around $57 billion at that time.
RRVL is aggressively expanding its business by acquiring companies and getting the franchise rights of leading international brands for India.
Besides, it is investing in scaling up infrastructure and also acquired the India business of German retail major Metro Cash and Carry.
Last month in the AGM of Reliance Industries, its chairman Mukesh Ambani had said several marquee global strategic and financial investors have shown strong interest in Reliance Retail.
Addressing shareholders, he had said if RRVL was listed on stock exchanges, then based on the current valuation, it would be among the top four listed entities in the country.
In less than three years, the valuation of Reliance Retail has doubled and the pace of this value creation is “unmatched globally”, Ambani had said.
In its latest annual report, RIL said Reliance Retail had achieved a significant milestone of crossing a billion transactions and its registered user base has grown to 249 million.
It operates a network of over 18,500 stores and digital commerce platforms across grocery, consumer electronics, fashion & lifestyle, and pharma consumption baskets.
In FY23, Reliance Retail’s digital commerce and new commerce businesses contributed to 18 per cent of its revenue, which stood at Rs 2.60 lakh crore.
Founded in 1976, KKR has approximately $519 billion in assets under management as of June 30, 2023.
