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Updated October 6th, 2020 at 20:41 IST

Reliance to sell 1.2% stake in retail arm to Abu Dhabi sovereign fund for Rs 5,512 Cr

Reliance Retail on Tuesday announced that a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) will invest Rs 5,512.50 crore for a 1.20% stake

Abu Dhabi Investment Authority
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Another fat cheque for Reliance is on its way, this time from Abu Dhabi's sovereign wealth fund. Reliance Retail on Tuesday announced that a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) will invest Rs 5,512.50 crore for a 1.20% equity stake in the company. This investment values the conglomerate's retail arm at a pre-money equity value of Rs 4.285 lakh crore.

"With this investment, RRVL [Reliance Retail Ventures Limited] 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 said in a statement.

Reliance Industries chairman Mukesh Ambani said the company hopes to benefit from ADIA’s strong track of value creation globally and its investment is a further endorsement of Reliance Retail’s performance and potential.

“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.”

Observing that Reliance Retail has rapidly established itself as one of the leading retail businesses in India, Hamad Shahwan Aldhaheri, Executive Director of the Private Equities Department at ADIA, said the fund's 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, RRVL said in its statement. Morgan Stanley acted as financial advisor to Reliance Retail.

Last week, Abu Dhabi-based state fund Mubadala invested Rs 6,247.5 crore in Reliance Retail Ventures for a 1.40% stake in the company.

READ | Reliance Raises Rs 7,350 Cr From GIC, TPG Through Retail Unit Stake Sale

READ | GIC To Pick 1.22% Stake In Reliance Retail For Rs 5,512.5 Crore

Ambitious plans, big pockets

Reliance Retail, a subsidiary of RRVL, operates India's largest and fastest-growing retail business serving close to 640 million footfalls across its nearly 12,000 stores nationwide. The oil-to-telecom conglomerate has been diversifying its business and shoring up its retail presence ahead of a big-bang listing.

Amid the coronavirus pandemic, it pushed the grocery business heavily and also launched JioMart, rivalling the likes of Amazon and Walmart backed Flipkart. Recently, it also made a foray into online pharmacy and acquired a majority stake in Netmeds for Rs 620 crore.

The company has ambitious plans to tie it's digital and telecom unit Jio, armed with a large subscriber base and cache of data in India, with its retail venture to maximize reach, particularly in underserved rural areas.

READ | Reliance Retail Ropes In Abu Dhabi-based Mubadala For ₹6,248 Crore Stake

READ | Reliance Retail Picks Up Massive Rs 3,675cr From General Atlantic In Latest Investment

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Published October 6th, 2020 at 20:41 IST

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