Abu Dhabi Investment Authority will invest Rs 4,966.8 crore in Reliance Industries' retail arm, giving the unit a pre-money equity value of 8.38 lakh crore.
ADIA's investment will translate into a 0.59% equity stake in Reliance Retail Ventures Ltd. on a fully diluted basis, the company said in a statement on Tuesday. The investment also makes Reliance Retail Ventures Ltd. among the top four companies by equity value in the country.
ADIA, the UAE's largest sovereign wealth fund, is already an investor in RRVL, having bought a 1.2% stake for Rs 5,512.5 crore in October 2020, when the Mukesh Ambani-led conglomerate raised Rs 47,265 crore by selling a 10.09% stake to various global investors, including Saudi PIF, GIC of Singapore, Mubadala, KKR, and Silverlake, among others.
ADIA's deal also follows two recent investments from KKR & Co. Inc. and Qatar Investment Authority for additional stakes in Reliance Retail.
The latest transaction is subject to customary approvals. Morgan Stanley was the financial advisor to Reliance Retail Ventures Ltd., while Cyril Amarchand Mangaldas and Davis Polk & Wardwell were the legal counsel.
"Their (ADIA) long-standing experience of over decades of value creation globally will further benefit us in implementing our vision and driving the transformation of the Indian retail sector," Isha Ambani, executive director, Reliance Retail Ventures Ltd., said in a statement. "ADIA's investment in RRVL is a further testament to their belief in the Indian economy and our business fundamentals, strategy, and execution capabilities.”
RRVL, through its subsidiaries and affiliates, operates an integrated omnichannel network of over 18,500 stores and digital commerce platforms across grocery, consumer electronics, fashion, and lifestyle, as well as pharma.
As of March 2023, RRVL's consolidated turnover was Rs 2.6 lakh crore, with a net profit of Rs 9,181 crore, according to its financial statement.
"Reliance Retail has demonstrated strong growth and adaptability in a market that is evolving at an unprecedented pace," said Hamad Shahwan Aldhaheri, Executive Director of the Private Equities Department, ADIA, adding that the deal will also help the globally diversified investment institution increase its exposure to India's dynamic and fast-growing consumer sector. "This investment aligns with our strategy of supporting our portfolio companies that are transforming their respective end markets."
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