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ADIA to invest Rs 5,512 crore in Reliance Retail Ventures
Mumbai, October 6, 2020
The Mukesh Ambani-led Reliance Industries Limited (RIL) and its subsidiary Reliance Retail Ventures Limited (RRVL) announced here today that a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA) will invest Rs 5,512.50 crore into RRVL.
This investment values RRVL at a pre-money equity value of Rs 4.285 lakh crore, a press release from Reliance said.
ADIA’s investment will translate into a 1.20% equity stake in RRVL on a fully diluted basis, it said.
With this investment, RRVL has raised Rs. 37,710 crore from leading global investors including Silver Lake, KKR, General Atlantic, Mubadala, GIC, TPG and ADIA in less than four weeks.
Reliance Retail Limited, a subsidiary of RRVL, operates India's largest, fastest growing and most profitable retail business serving close to 640 million footfalls across nearly 12,000 stores nationwide.
"Reliance Retail’s vision is to galvanize the Indian retail sector through an inclusive strategy serving millions of customers by empowering millions of farmers and micro, small and medium enterprises (MSMEs) and working closely with global and domestic companies as a preferred partner, to deliver immense benefits to Indian society, while protecting and generating employment for millions of Indians.
"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. This will enable the merchants to use technology tools and an efficient supply chain infrastructure to deliver a superior value proposition to their own customers," the release said.
Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said, “We are delighted with ADIA’s current investment and continued support and hope to benefit from its strong track record of over four decades of value creation globally. The investment by ADIA is a further endorsement of Reliance Retail’s performance and potential and the inclusive and transformational New Commerce business model that it is rolling out.”
Hamad Shahwan Al Dhaheri, Executive Director of the Private Equities Department at ADIA, said, “Reliance Retail has rapidly established itself as one of the leading retail businesses in India and, by leveraging both its physical and digital supply chains, is strongly positioned for further growth. This investment is consistent with our strategy of investing in market leading businesses in Asia linked to the region’s consumption-driven growth and rapid technological advancement.”
The transaction is subject to regulatory and other customary approvals, the release said.
Morgan Stanley acted as financial adviser to Reliance Retail and Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as legal counsels.
RRVL, the holding company of all the retail companies under the RIL Group, reported a consolidated turnover of Rs 162,936 crore ($ 21.7 billion) and net profit of Rs 5,448 crore ($ 726.4 million) for the year ended March 31, 2020.
Established in 1976, ADIA is a globally-diversified investment institution that prudently invests funds on behalf of the Government of Abu Dhabi through a strategy focused on long-term value creation.