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ADIA to invest 5,512.50 crore in Reliance Retail for 1.2% stake

Mukesh Ambani, chairman of Indian energy company Reliance Industries, speaks during the Vibrant Gujarat Global Investors' Summit 2011 (VGGIS) at Gandhinagar in the western Indian state of Gujarat January 12, 2011. REUTERS/Amit Dave/File Photo (REUTERS)Premium
Mukesh Ambani, chairman of Indian energy company Reliance Industries, speaks during the Vibrant Gujarat Global Investors' Summit 2011 (VGGIS) at Gandhinagar in the western Indian state of Gujarat January 12, 2011. REUTERS/Amit Dave/File Photo (REUTERS)

  • With this, RIL has agreed to sell a total stake of 8.48% to seven investors in RRVL since 9 September
  • RRVL has about 12,000 stores across the country

Abu Dhabi Investment Authority (ADIA) will invest 5,512.50 crore in Reliance Retail Ventures Ltd (RRVL) for a 1.2% stake in the Reliance Industries subsidiary. This is the seventh stake sale by the Mukesh Ambani company to as many investors in less than four weeks, bringing the total money raised to 37,710 crore ($5.13 billion).

With this, RIL has agreed to sell a total stake of 8.48% to seven investors in RRVL since 9 September. ADIA’s investment values RRVL at a pre-money equity value of 4.29 trillion.

Other investors in RRVL include Silver Lake Partners, KKR, General Atlantic, Mubadala, GIC and TPG. Reliance is currently in the process of completing its acquisition of Future Group’s retail, wholesale and logistics businesses.

“Reliance Retail’s vision is to galvanize the Indian retail sector through an inclusive strategy …Reliance Retail, through its new commerce strategy, has started a transformational digitalization of small and unorganised merchants and is committed to expanding the network to over 20 million of these merchants," said RIL in a press release.

The beeline of investors putting their money behind Reliance’s retail venture is a repeat of a similar exercise Reliance executed at its telecom venture Jio underwent some months ago. In a drill that ended mid-July and lasted less than 3 months, RIL raised 1.52 trillion by selling a third of its stake in Jio Platforms.

Incidentally, all but one investor in RIL’s retail venture are also investors in Jio Platforms, the exception being Singapore’s GIC. ADIA has a 1.16% stake in Jio which it bought for 5,683.50 crrore.

The focus on getting foreign investors to another consumer-facing venture is part of RIL’s playbook of combining its vast digital network with its retail business and being present in every Indian household.

RRVL has about 12,000 stores across the country and with the ongoing investments coupled with the Future Group deal, Ambani will stay on course in his aspiration to command the retail market, competing head-on against billionaire Jeff Bezos' Amazon.com and Walmart-owned Flipkart.

RRVL recorded a consolidated turnover of 1.63 trillion ($ 21.7 billion) and a net profit of 5,448 crore ($ 726.4 million) for the year ended 31 March.

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