RIL shares in focus as firm may sell 8-10% additional stake in Reliance Retail: Report

Reliance Industries Ltd (RIL) may look to sell an additional 8-10 per cent stake in retail arm Reliance Retail Ventures Ltd (RRVL) to fund expansion, retire debt and prepare for the initial public offering (IPO), a media report quoting two senior industry executives aware of the plans, said.

This process would take place in tranches over 12-15 months, The Economic Times reported adding that the move would be critical for the proposed IPO by the holding company of Reliance's retail operations.

The current valuation of $100 billion for Reliance Retail is considered too large for the market to absorb. The company aims to dilute another 7-10 per cent equity to make the IPO size manageable. The proceeds from the stake sales will be used for store expansion and debt reduction, the report suggested.

The report came days after RIL sold 0.99 per cent stake in Reliance Retail to a wholly-owned subsidiary of Qatar Investment Authority for Rs 8,278 crore. This latest investment values RRVL at a pre-money equity value of Rs 8.278 lakh crore. The previous fund-raise round by RRVL in 2020 from various global investors of an aggregate amount of Rs 47,265 crore was done at a pre-money equity value of Rs 4.21 lakh crore.

Isha Mukesh Ambani, Director, RRVL said her company was looking forward to benefitting from QIA’s global experience and strong track record of value creation, RIL further develops Reliance Retail Ventures Limited into a world class institution, driving transformation of the Indian retail sector.

The investment by QIA is a strong endorsement of a positive outlook towards Indian economy and Reliance’s retail business model, strategy and execution capabilities, Ambani said.

Meanwhile, Reliance Industries announced that it has entered into an understanding with The Oberoi Hotels and Resorts (Oberoi) to jointly manage three properties across India and the UK.