ADIA to invest Rs 4,966.80 crore in Reliance Retail for 0.59% stake

Abu Dhabi Investment Authority will invest Rs 4,966.80 crore into Reliance Retail Ventures Limited for a 0.59 per cent stake in the company, said Reliance Industries on Friday. "This investment values RRVL at a pre-money equity value of Rs 8.381 lakh crore (USD 100.83 billion), which makes it among the top four companies by equity value in the country," Reliance Industries said in a regulatory filing.

This investment by a wholly-owned subsidiary of Abu Dhabi Investment Authority (ADIA) "will translate into an equity stake of 0.59 per cent" in Reliance Retail Ventures Limited (RRVL) on a fully diluted basis, it added.

RRVL is the holding company of the retail business of RIL, which operates an integrated omnichannel network of over 18,500 stores and digital commerce platforms across grocery, consumer electronics, fashion & lifestyle, and pharma consumption baskets.

RRVL Executive Director Isha Mukesh Ambani said: "We are pleased to further deepen our relationship with ADIA with their continued support as an investor in RRVL. Their long-standing experience of over 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, she added.

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".

In 2020, RRVL had raised Rs 47,265 crore (around USD 6.4 billion) from global private equity funds for a 10.09 per cent stake, valuing the company at more than Rs 4.2 lakh crore.

This was the largest fundraising exercise in the sector at that time.

The company had raised funds from Silver Lake, KKR, Mubadala, Abu Dhabi Investment Authority, GIC, TPG, General Atlantic and Saudi Arabia's Public Investment Fund at a valuation of around USD 57 billion at that time.

RRVL is aggressively expanding its business here by acquiring the 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, during the AGM of Reliance Industries, its Chairman Mukesh Ambani had said several marquee global strategic and financial investors have shown strong interest in Reliance Retail.

Addressing shareholders, he had said 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 to 18 per cent of its revenue, which stood at Rs 2.60 lakh crore.