Reliance Retail Ventures Limited (RRVL) stated on Friday that an Abu Dhabi Investment Authority (ADIA) wholly-owned company will invest Rs 4,967 crore in the retail arm of Mukesh Ambani-led Reliance Industries Ltd. This investment places RRVL at a pre-money equity value of Rs 8.38 lakh crore, ranking it among the top four corporations in the country by equity value.
“We are pleased to further deepen our relationship with ADIA with their continued support as an investor in Reliance Retail Ventures Limited,” said Isha Mukesh Ambani, Executive Director of Reliance Retail Ventures Limited. Their decades of worldwide value creation experience will help us even more in implementing our vision and accelerating the transformation of the Indian retail sector. ADIA’s investment in RRVL demonstrates their confidence in the Indian economy as well as our company fundamentals, strategy, and execution capabilities.”
“Reliance Retail has demonstrated strong growth and adaptability in a market that is evolving at an unprecedented pace,” stated Hamad Shahwan Aldhaheri, Executive Director of the ADIA’s Private Equities Department. This investment is consistent with our goal of assisting portfolio firms in revolutionizing their respective end markets. We are excited to collaborate with the Reliance Group and expand our exposure to India’s dynamic and rapidly rising consumer sector.”
According to Reuters, Reliance was in advanced talks with global investors last month to raise roughly $2.5 billion ahead of a prospective stock market debut.
ADIA
RRVL operates India’s largest, fastest growing, and most profitable retail business through its subsidiaries and associates, serving 267 million loyalty customers through an integrated omnichannel network of over 18,500 stores and digital commerce platforms across grocery, consumer electronics, fashion & lifestyle, and pharma consumption baskets.
Morgan Stanley served as Reliance Retail Ventures Limited’s finance advisor, and Cyril Amarchand Mangaldas and Davis Polk & Wardwell served as legal counsel.
Following this transaction, KKR’s stake in RRVL, the holding company of billionaire Mukesh Ambani-led RIL’s retail operation, climbed to 1.42% from 1.17%.
Qatar Investment Authority (QIA) paid RIL Rs 8,278 crore for a 1% stake.
RRVL raised Rs 47,265 crore (about $6.4 billion) in 2020 from global private equity investors for a 10.09% stake, valuing the company at more over Rs 4.2 lakh crore. Based on current exchange rates, Saudi Arabia’s Public Investment Fund contributed $1.15 billion.
Chairman Mukesh Ambani stated at Reliance Industries’ AGM in August that many prominent global strategic and financial investors had expressed considerable interest in Reliance Retail.
Addressing shareholders, he stated that if RRVL was listed on stock exchanges, it would be among the top four listed businesses in the country based on present valuation.
Reliance Retail’s valuation has more than doubled in less than three years, and the rate of wealth generation is ”unmatched internationally,” according to Ambani.
According to RIL’s most recent annual report, Reliance Retail has crossed a billion transactions and its registered user base has expanded to 249 million.
Reliance Retail’s digital commerce and new commerce operations contributed 18% of its total revenue of Rs 2.60 lakh billion in FY23.
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