Reliance Retail raises ₹7,350 crore from GIC, TPG

The investments value Reliance Retail at a pre-money equity value of ₹4.285 lakh crore.

In less than three days, Reliance Industries has entered into five deals to sell stake in RRVL. (REUTERS)

Billionaire Mukesh Ambani's Reliance Industries Ltd on Friday announced to raise ₹7,350 crore from two investors -- Singapore's sovereign wealth fund GIC and Global alternative asset firm TPG -- by selling a stake in group's retail arm.  

Through two separate deals, Reliance Industries will sell 1.63 per cent stake in Reliance Retail Ventures Limited (RRVL). GIC will invest ₹5,512.5 crore to buy 1.22 per cent share in RRVL, the Indian firm said in a statement. It said TPG will invest ₹1,837.5 crore to buy 0.41 per cent stake in RRVL.

The investments value Reliance Retail at a pre-money equity value of ₹4.285 lakh crore.

In less than three days, Reliance Industries has entered into five deals to sell stake in RRVL. Earlier, On Thursday, RIL had announced Abu Dhabi-based sovereign wealth fund Mubadala Investment Co will invest ₹6,247.5 crore to buy a 1.4 per cent stake in its retail arm. 

On Wednesday, global private equity firm General Atlantic picked up a 0.84 per cent stake in the company for ₹3,675 crore. Also, US PE investor Silver Lake made a second investment of ₹1,875 crore, taking its total fund infusion in Reliance Retail to ₹9,375 crore for a 2.13 per cent stake.

KKR had previously taken a 1.28 per cent stake in the firm for ₹5,550 crore.

Commenting on the development Mukesh Ambani, chairman and managing director of Reliance Industries, said: “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,” he said.

GIC Chief Executive Officer Lim Chow Kiat 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.”   

The transactions are subject to regulatory and other customary approvals.   

While, TPG Co-CEO Jim Coulter 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 utilised technology and scale to position Reliance Retail as an incredibly strong, well-organised, 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,” he said.

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 the consumer experience. TPG's rich experience will be invaluable to the Reliance Retail mission.”

TPG is making the investment from its TPG Capital Asia fund.

Following the sell-down in its digital unit Jio Platforms, Reliance's focus has shifted to retail with the acquisition of Future Group's businesses and investment by global private equity firms/strategic investors. 

All 13 investors who had poured in a combined ₹1.52 lakh crore in Jio Platforms have been offered a chance to explore investing in the retail unit.

Besides Silver Lake, KKR, General Atlantic and Mubadala, the other investors in Jio Platforms — which houses India's youngest but largest telecom operator Jio — include Facebook and Google. 

Reliance Retail has consolidated its dominant market position in offline retail through its recent acquisition of retail, wholesale, logistics and warehouse businesses of Future Group for an enterprise value of ₹24,173 crore.

The firm in May this year launched JioMart, its e-commerce platform. Reliance aims to digitise kirana stores through its new commerce business. 

In July, JioMart was serving 400,000 orders a day and is currently operational in 200 cities. With this, Jio Platforms and Reliance Retail account for over ₹9 lakh crore of RIL's valuation of around ₹15 lakh crore.

Monetisation of retail, complemented by the capitalisation of Jio's tech assets, is expected to enable Reliance to take on Amazon and Walmart in India's online retail space.