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Singapore's GIC to invest Rs 5,512 crore in Reliance Retail Ventures
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 in RRVL.
The investment values 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, it said.
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 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 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.