TPG, Mubadala next in line to invest around $1.8 billion in Reliance Retail

After the Rs 3,675 crore General Atlantic deal, Reliance Retail Venture (RRVL) plans to ink stake sale deals with private equity investors TPG and Mubadala. TPG looks to invest around $700-800 million, investment banking sources told BusinessToday.In. "There are 3-4 deals almost nearing conclusion. They include some of the funds from Middle East like Mubadala. These deals will be announced back-to-back in the next one month," the sources said.

TPG declined to comment. RRVL said it evaluates various opportunities on an ongoing basis, but doesn't want to comment on media speculation.

Also read: Mukesh Ambani's Reliance Retail sells 1.28% stake to KKR for Rs 5,550 crore

Other sources said that Carlyle was also in the race, but they are not actively pursuing the deal. Earlier, there were reports that the offers from Carlyle and SoftBank had been put onto a waiting list because of strong interest from investors.

Recent reports said that Abu Dhabi state fund Mubadala Investment Co is in advanced talks to invest up to $1 billion in the retail division of India's Reliance Industries. L Catterton and Abu Dhabi Investment Authority (ADIA) are the other names doing the rounds. RRVL is on a fund raising spree and has secured around $1.8 billion from KKR & Co and Silver Lake Partners.

In the third deal, General Atlantic agreed to invest Rs 3,675 crore into RRVL. This investment values RRVL at a pre-money equity value of Rs 4.285 lakh crore. General Atlantic's investment will translate into a 0.84 per cent equity stake in RRVL on a fully diluted basis.

Also read: General Atlantic to invest Rs 3,675 crore in Mukesh Ambani's Reliance Retail

Earlier, sources close to the developments told BusinessToday.In that Reliance targets to offload 15-20 per cent stake in RRVL to private equity players and strategic investors to raise up to Rs 80,000 crore.

RRVL, which has 12,000 stores across the country, has recently announced its acquisition of retail, logistics and warehousing business of Future Group for Rs 24,713 crore. Reliance will also pick up 13 per cent stake in Kishore Biyani's remaining business under Future Enterprises Ltd.

Reliance Retail posted Rs 1.63 lakh crore revenue in 2019-20, compared to Rs 34,000 crore in 2016-17. The earnings before interest and tax (EBIT) went up to Rs 8,263 crore as against Rs 784 crore in this period.

Also read: Reliance Retail's next cheque: Mubadala in talks to invest up to $1 billion