ADIA invests ₹4,966.8 cr in Reliance Retail at ₹8.4 lakh cr valuation

Days after investment from global investment firm KKR and Qatar Investment Authority, Mukesh Ambani-led Reliance Retail Ventures Ltd (RRVL) has attracted another investment worth ₹4,966.80 crore from the Abu Dhabi Investment Authority (ADIA) at a pre-money equity value of ₹8.381 lakh crore.

ADIA's investment will translate into an equity stake buy of 0.59% in Reliance Retail on a fully diluted basis and will make it among the "top four companies by equity value" in the country.

ADIA is a global investment institution that invests funds on behalf of the government of Abu Dhabi via a strategy focused on long-term value creation.

Reliance Retail has been on a fund-raising spree of late, with KKR investing ₹2,069 cr in September and Qatar-based QIA infusing ₹8,278 crore in August, in the retail giant.

New York-based global investment firm KKR via an affiliate (Asian Fund IV) bought a 0.25% stake at a pre-money equity value of ₹8.361 lakh crore. The investment, combined with its stake from ₹5,550 crore invested in Reliance Retail in 2020, takes its total equity stake in Reliance Retail to 1.42% on a fully diluted basis. Qatar Investment Authority, on the other hand, bought a 0.99% stake at a pre-money equity value of ₹8.278 lakh crore on a fully diluted basis.

“We are pleased to further deepen our relationship with ADIA with their continued support as an investor in Reliance Retail Ventures Limited. Their long-standing experience of over decades of value creation globally will further benefit us in implementing our vision and driving transformation of the Indian retail sector,” says Isha Mukesh Ambani, executive director, Reliance Retail.

Hamad Shahwan Aldhaheri, executive director, of the private equities department, ADIA, says Reliance Retail has shown strong growth and adaptability in a market evolving at an unprecedented pace. "This investment aligns with our strategy of supporting our portfolio companies that are transforming their respective end markets.”

Morgan Stanley acted as financial advisor to Reliance Retail Ventures Limited and Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as legal counsels.

Additionally, U.K.-based clothing store Superdry Plc this week said the company signed an IP joint venture agreement with Reliance Brands Holding UK Ltd (RBUK), a wholly-owned subsidiary of Reliance Retail, for the sale of Superdry’s intellectual property assets in South Asia. The sale of IP assets includes the SUPERDRY brand and related trademarks in India, Sri Lanka, and Bangladesh. Reliance Brands Holding UK and Superdry will own 76% and 24% stake, respectively, in the JV. Notably, Reliance Brands Holding UK has been Superdry’s exclusive franchise partner in India since 2012.

RRVL operates India's largest retail business spanning 18,500 stores and digital commerce platforms. It reported a consolidated turnover of ₹260,364 crore and a net profit of ₹9,181 crore for the year ended March 31, 2023. Its parent company, RIL reported a consolidated revenue of ₹9,74,864 crore, and a net profit of ₹73,670 crore for the year ended March 31, 2023.