KKR invests ₹2,069 cr in Reliance Retail at ₹8.4 lakh cr valuation
Mukesh Ambani-led Reliance Industries' Reliance Retail Ventures Ltd (RRVL) has announced an investment worth ₹2,069.50 crore from New York-based global investment firm KKR via an affiliate (Asian Fund IV) at a pre-money equity value of ₹8.361 lakh crore.
KKR’s follow-on investment makes Reliance Retail among the top four companies by equity value in the country. The stake buy will translate into an additional equity stake of 0.25% on a fully diluted basis.
The investment, combined with its stake from ₹5,550 crore invested in Reliance Retail in 2020, will take its total equity stake in Reliance Retail to 1.42% on a fully diluted basis.
"We highly value our deepening partnership with KKR, and their latest investment in RRVL after their previous investment further reinforces their strong belief in RRVL’s vision and capabilities," says Isha Ambani, director, Reliance Retail.
Reliance Retail's 2020 fund-raise round worth ₹47,265 crore from various global investors was done at a pre-money equity value of ₹4.21 lakh crore. KKR is also one of the major investors in RIL's other company Jio Platforms.
Reliance Retail, through its subsidiaries and associates, claims to operate a retail business that serves 267 million loyalty customers, with a network of over 18,500 stores and digital commerce platforms across grocery, consumer electronics, fashion & lifestyle, and pharma consumption baskets.
"RRVL’s vision is to galvanise the Indian retail sector through an inclusive strategy serving millions of customers, empowering 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," the company adds.
Through its new commerce business, Reliance Retail has digitised over 3 million small and unorganised merchants, which will enable merchants to use technology tools and an efficient supply chain infrastructure.
KKR has around $519 billion in assets under management as of June 30, 2023, and the company focuses its investment in enterprises at the forefront of technology and digital transformation, including in consumer retail and e-commerce. Joe Bae, Co-CEO of KKR says the company is "impressed" by Reliance Retail's vision and extensive work to empower retailers across India via digitalisation.
Gaurav Trehan, head of Asia Pacific Private Equity and Head of India, KKR, says Reliance Retail is a "true corporate leader" and "innovator" in India, and its differentiated model has the potential to digitalise and transform the country’s retail industry.
RRVL had reported a consolidated turnover of ₹260,364 crore and 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.
The transaction is subject to regulatory and other customary approvals. Morgan Stanley acted as financial advisor to Reliance Retail and Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as legal counsels.