Billionaire Mukesh Ambani’s Reliance Industries Ltd on Friday announced raising Rs 7,350 crore from two investors – Singapore’s sovereign wealth fund GIC and global alternative property firm TPG – by selling a stake in the group’s retail arm.
Through two separate deals, Reliance Industries will sell 1.63 percent stake in Reliance Retail Ventures Limited (RRVL).
GIC will invest Rs 5,512.5 crore to buy a 1.22 per cent stake in Indian firm RRVL.
It said TPG would invest Rs 1,837.5 crore to buy a 0.41 percent stake in RPGL.
The pre-money equity value of Reliance Retail in investments is Rs 4.285 lakh crore.
In less than three days, Reliance Industries has entered into five deals to sell stake in RRVL.
Earlier, on Thursday, RIL announced Abu Dhabi-based sovereign wealth fund Mubadala Investment Co, which would invest Rs 6,247.5 crore to buy a 1.4 percent stake in its retail arm. On Wednesday, global private equity firm General Atlantic bought a 0.84 percent stake in the company for Rs 3,675 crore. In addition, American PE investor Silver Lake made a second investment of Rs 1,875 crore, taking its total fund infusion to Rs 9,375 crore for a 2.13 percent stake in Reliance Retail.
KKR had earlier taken a 1.28 percent stake in the firm for Rs 5,550 crore.
Commenting on the development, Reliance Industries Chairman and Managing Director Mukesh Ambani said, “I am delighted that GIC, which has a track record of close to four decades of successful long-term investment across the globe, is partnering with Reliance Retail Its mission is to change the Indian retail landscape. GIC’s global network and track record of long-term partnerships will be invaluable to the transformation story of Indian retail. “” This investment is a strong endorsement of our strategy and India’s capability, “he said.
GIC Chief Executive Lim Chow Kiat said: “GIC is pleased to partner with Reliance through this new investment, which will enable the company to position Reliance Retail for strong secular growth in the Indian retail market. ” Transactions are subject to regulatory and other customary approvals.
Whereas, TPG co-CEO Jim Kuplter said: “Regulatory changes, consumer demographics and technological disruptions are causing seismic changes across the entire retail value chain in India. In the midst of this change, Reliance Industries has used technology and scale to position Reliance Retail as an incredibly strong, well-organized and innovative leader.
“We are excited to join them as they seek to create a more inclusive retail industry that allows Rays and Indian consumers to benefit from the connectivity, efficiency and accessibility of the Reliance Retail Omnichannel platform,” he said.
Isha Ambani, Director of Reliance Retail said, “We are delighted to welcome TPG to the Reliance Retail family in our journey to revolutionize the Indian retail landscape and improve the economic prospects of millions of merchants and enhance the consumer experience. TPG’s rich experience will be invaluable to Reliance Retail Mission. TPG is investing from its TPG Capital Asia Fund.
Following the sell-off in its digital unit Jio Platforms, Reliance’s focus has shifted to the retail sector with the acquisition of Future Group businesses and investment by global private equity firms / strategic investors. All the 13 investors who jointly invested Rs 1.52 lakh crore in Jio Platforms have been given the opportunity to invest in retail units.
Apart from Silver Lake, KKR, General Atlantic and Mubadala, other investors in Jio platforms – home to India’s youngest but largest telecom operator Jio – include Facebook and Google. Reliance Retail has consolidated its dominant market position in offline retail through a recent acquisition of the retail, wholesale, logistics and warehouse businesses of Future Group for an enterprise value of Rs 24,173 crore.
In May this year, the firm launched its e-commerce platform JioMart. Reliance aims to digitalize grocery stores through its new commerce business. In July, JioMart was placing 400,000 orders a day and is currently operational in 200 cities. With this, Jio Platforms and Reliance Retail have about 15 lakh crore rupees over RIL valuation of over Rs 9 lakh crore.
The monetization of retail, complemented by the capitalization of Jio’s technical assets, is expected to enable Reliance to take over Amazon and Walmart in India’s online retail space.
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