GIC to invest Rs 5,512 crore in Reliance Retail Ventures, TPG Rs 1837 crore
Mumbai, October 2, 2020
The Mukesh Ambani-led Reliance Industries Limited (RIL) and its subsidiary Reliance Retail Ventures Limited (RRVL) announced today that Singapore's GIC will invest Rs 5,512.5 crore and global alternative asset firm TPG Rs 1837.5 crore in RRVL.
The investments value RRVL at a pre-money equity value of Rs 4.285 lakh crore, a press release from Reliance said.
GIC’s investment will translate into a 1.22% equity stake in RRVL on a fully diluted basis, while TPG's investment would work out to a 0.41% stake in the company.
Reliance Retail Limited, a subsidiary of RRVL, operates India's 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, “It gives me great pleasure to welcome GIC to the Reliance Retail family. I am delighted that GIC, with its track record of close to four decades of successful long-term value investing across the world, is partnering with Reliance Retail in its mission to transform 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 potential.”
Lim Chow Kiat, Chief Executive Officer, GIC, said: “GIC is pleased to partner with Reliance through this new investment, which will enable the company to position Reliance Retail for the strong secular growth in India’s retail market. We believe Reliance Retail will continue to use its extensive supply chain and store networks, as well as strong logistics and data infrastructure, to add value to its customers and shareholders.”
The investment by TPG is the second by it in a subsidiary of RIL after its Rs. 4,546.80 crore investment in Jio Platforms announced earlier this year.
“I am pleased to welcome TPG as valued investors in Reliance Retail Ventures mission of growing and transforming the Indian Retail ecosystem for the benefit of all Indians. TPG has a proven track record of being a valuable partner to global technology businesses and industry leaders and we look forward to their guidance and support in our journey," Ambani said.
Jim Coulter, Co-CEO, TPG, said, “Regulatory changes, consumer demographics and technological disruption are creating seismic shifts across the entire retail value chain in India. In the midst of this transformation, Reliance Industries has utilized technology and scale to position Reliance Retail as an incredibly strong, well-organized, and innovative leader. We are excited to join with them as they seek to create a more inclusive retail industry that allows Kiranas and Indian consumers to benefit from the connectivity, efficiency, and accessibility of the Reliance Retail omnichannel platform.”
Isha Ambani, Director of Reliance Retail, said, “We are delighted to welcome TPG to the Reliance Retail family in our journey of revolutionizing the Indian Retail landscape and improving the economic prospects of millions of merchants and enhancing consumer experience. TPG’s rich experience will be invaluable to the Reliance Retail mission.”
Puneet Bhatia, Co-Managing Partner and Country Head, India of TPG Capital Asia, said, “There is a significant opportunity to transform the Indian retail ecosystem for the better. Through their New Commerce initiative, Reliance Retail continues to lead the industry by creating a retail platform that meets the demands of a new generation of Indian consumers. We are excited to work with Reliance Industries as they reimagine the retail experience across the value chain.”
TPG is making the investment from its TPG Capital Asia fund, the release said.
The transactions are subject to regulatory and other customary approvals, it said.
Morgan Stanley acted as financial adviser to Reliance Retail and Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as legal counsels.
Deloitte Touche Tohmatsu India LLP acted as financial adviser to TPG and Shardul Amarchand Mangaldas & Co. acted as legal counsel to TPG.
RRVL 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.
GIC is a leading global investment firm established in 1981 to manage Singapore’s foreign reserves. It has investments in over 40 countries and has been investing in emerging markets for more than two decades.
TPG is a leading global alternative asset firm founded in 1992 with more than $83 billion of assets under management across a wide range of asset classes, including private equity, growth equity, real estate and public equity.