ADIA to invest Rs 4,967 cr in Reliance Retail for 0.59% stake

Reliance Retail Ventures Limited (RRVL) on Friday announced that a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) will invest Rs 4,967 crore into the retail arm of Mukesh Ambani-led Reliance Industries Ltd. This investment values RRVL at a pre-money equity value of Rs 8.38 lakh crore, which makes it among the top four companies by equity value in the country.

This investment by ADIA will translate into an equity stake of 0.59% in RRVL on a fully-diluted basis.

Isha Mukesh Ambani, Executive Director, Reliance Retail Ventures Limited, said: “We are pleased to further deepen our relationship with ADIA with their continued support as an investor in Reliance Retail Ventures Limited. Their long-standing experience of over decades of value creation globally will further benefit us in implementing our vision and driving transformation of the Indian retail sector. ADIA’s investment in RRVL is a further testament to their belief in the
Indian economy and our business fundamentals, strategy and execution capabilities.”

Hamad Shahwan Aldhaheri, Executive Director of the Private Equities Department, ADIA, said: “Reliance Retail has demonstrated strong growth and adaptability in a market that is evolving at an unprecedented pace. This investment aligns with our strategy of supporting our portfolio companies that are transforming their respective end-markets. We are pleased to partner with the Reliance Group, and increase our exposure to India’s dynamic and fast-growing consumer sector.”

Reuters had reported last month that Reliance was in advanced talks with global investors to raise around $2.5 billion ahead of a potential stock market listing.

RRVL, through its subsidiaries and associates, operates India's largest, fastest growing, and most profitable retail business serving 267 million loyalty customers with 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 acted as financial advisor to Reliance Retail Ventures Limited and Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as legal counsels.

Last month, global investment firm KKR invested Rs 2,069.50 crore in RRVL for a 0.25% additional stake of the retailer.

After this investment, KKR's shareholding in RRVL, the holding company of the retail business of billionaire Mukesh Ambani-led RIL, increased to 1.42% from 1.17%.

RIL received Rs 8,278 crore from Qatar Investment Authority (QIA) for around 1% stake

Earlier in 2020, RRVL had raised Rs 47,265 crore (around $6.4 billion) from global private equity funds for a 10.09% stake, valuing the company at more than Rs 4.2 lakh crore. Saudi Arabia's Public Investment Fund had pumped in $1.15 billion, based on current exchange rates.

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.

In August, in the AGM of Reliance Industries, Chairman Mukesh Ambani said that several marquee global strategic and financial investors have shown strong interest in Reliance Retail.

Addressing shareholders, he had said that 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.

In FY23, Reliance Retail's digital commerce and new commerce businesses contributed 18% of its revenue, which stood at Rs 2.60 lakh crore.

With inputs from PTI