New Delhi: Reliance Retail Ventures Ltd (RRVL) on Friday said that sovereign wealth fund Abu Dhabi Investment Authority (ADIA) will invest an additional ₹4,966.80 crore in the retail unit of Reliance Industries Ltd, following a 1.18% stake purchase in the company in October 2020.
The fresh investment values RRVL at a pre-money equity value of ₹8.38 trillion, making it among India’s top four most valuable companies.
The investment by ADIA will translate into an equity stake of 0.59% in RRVL on a fully diluted basis, the company said in a statement late on Friday. In 2020, ADIA, via a wholly owned subsidiary, promised to invest ₹5,512.50 crore in RRVL.
ADIA’s investment follows Qatar Investment Authority’s (QIA’s) ₹8,278 crore investment into RRVL in August.
Between 2020 and 2021, the company has raised a total of ₹47,265 crore from nine global investors, including sovereign wealth fund Mubadala Investment Co., private equity firm General Atlantic, Silver Lake Partners, TPG Capital, Public Investment Fund, GIC, investment firm KKR, ADIA, and SLP Co-investors at a pre-money equity value of ₹4.21 trillion.
Together, the above investors, including the one announced on Friday, now hold a 12.88% stake in the company.
RRVL’s business, which spans grocery retail, consumer electronics, apparel, footwear, online commerce, and jewellery, has come to dominate the country’s retail landscape. RRVL, through its subsidiaries and associates, operates an integrated omni-channel network of over 18,500 retail stores and digital commerce platforms.
“We are pleased to further deepen our relationship with ADIA with their continued support as an investor in Reliance Retail Ventures Ltd. Their long-standing experience of decades of value creation globally will further benefit us in implementing our vision and driving the 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,” Isha Mukesh Ambani, executive director, Reliance Retail Ventures Ltd, said.
RRVL reported a consolidated revenue of ₹2.6 trillion and a net profit of ₹9,181 crore in FY23. Reliance Retail operates stores straddling categories such as electronics, fashion apparel, beauty, grocery, footwear, food, jewellery, toys, e-commerce, luxury, and lifestyle. Reliance Retail also serves as the master distributor for Jio connectivity services, which are sold through a network of MyJio and Digital stores. Its e-commerce platforms include Ajio, Netmeds, Milkbasket, and JioMart. It is the largest retailer in the country.
“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,” Hamad Shahwan Aldhaheri, executive director of the private equities department, ADIA, said.
Morgan Stanley acted as the financial adviser to Reliance Retail Ventures and Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as legal counsels.
The investments come as Reliance Industries Ltd is eyeing a public listing of its retail subsidiary. RRVL has made aggressive bets in the recent past acquiring for instance Metro Cash and Carry’s wholesale business in India.
Ambani said in August that “several marquee global strategic and financial investors have shown strong interest” in his company.
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