Abu Dhabi Investment Authority to invest Rs 5,512.50 crore in Mukesh Ambani's Reliance Retail

Billionaire Mukesh Ambani-led Reliance Industries on Tuesday said that a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) will invest Rs 5,512.50 crore into retail arm, Reliance Retail Ventures Limited (RRVL). This investment values Reliance Retail at a pre-money equity value of Rs 4.285 lakh crore.

"ADIA's investment will translate into a 1.20 per cent equity stake in RRVL on a fully diluted basis," RIL said in a regulatory filing.

With this investment, RRVL has raised Rs 37,710 crore from leading global investors including Silver Lake, KKR, General Atlantic, Mubadala, GIC, TPG and ADIA in less than four weeks.

Commenting on the development, Mukesh Ambani, Chairman and Managing Director of RIL, said, "We are delighted with ADIA's current investment and continued support and hope to benefit from its strong track record of over four decades of value creation globally."

"The investment by ADIA is a further endorsement of Reliance Retail's performance and potential and the inclusive and transformational New Commerce business model that it is rolling out," he added.

Hamad Shahwan Aldhaheri, Executive Director of the Private Equities Department at ADIA, said, "Reliance Retail has rapidly established itself as one of the leading retail businesses in India and, by leveraging both its physical and digital supply chains, is strongly positioned for further growth. This investment is consistent with our strategy of investing in market leading businesses in Asia linked to the region's consumption-driven growth and rapid technological advancement."

The transaction is subject to regulatory and other customary approvals. Morgan Stanley acted as financial advisor to Reliance Retail and Cyril Amarch and Mangaldas and Davis Polk & Wardwell acted as legal counsels.

On October 1, Abu Dhabi's sovereign investor Mubadala Investment Company had announced an investment of Rs 6,247.5 crore in Reliance Retail Ventures to acquire 1.40 per cent equity stake in the company. This came a day after California-based Silver Lake committed an additional investment of Rs 1,875 crore in Reliance Retail Ventures Limited (RRVL), taking its total investment in the company to Rs 9,375 crore, equivalent to 2.13 per cent stake in the company. Reliance Retail has also signed a deal with General Atlantic for an investment of Rs 3,675 crore for 0.84 per cent stake. Private equity firm KKR has also said that it would invest Rs 5,550 crore in RRVL for 1.28 per cent stake.

Reliance Retail, a subsidiary of RRVL, operates India's largest and most profitable retail business serving close to 640 million footfalls across its 12,000 stores nationwide. Reliance Retail's vision is to galvanise the Indian retail sector through an inclusive strategy serving millions of customers by empowering millions of farmers and micro, small and medium enterprises (MSMEs) and working closely with global and domestic companies as a preferred partner, to protect and generate employment for millions of Indians.

Reliance Retail, through its new commerce strategy, has started a transformational digitalisation of small and unorganised merchants and aimed to expand the network to over 20 million of these merchants. This will enable the merchants to use technology tools and an efficient supply chain infrastructure to deliver a superior value proposition to their own customers.

By Chitranjan Kumar

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