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Tuesday, October 20, 2020

KKR to invest Rs 5,550 crore in Reliance Retail at pre-money equity valuation of Rs 4.21L crore

The deal marks the second investment by KKR in a subsidiary of Reliance Industries, following a Rs 11,367 crore investment in Jio Platforms announced earlier this year.

By: ENS Economic Bureau | New Delhi | Updated: September 24, 2020 12:26:57 am
Reliance Retail adds Future Group firms to its shopping cartMukesh Ambani’s Reliance Industries Ltd (RIL) has agreed to acquire the retail business of Kishore Biyani’s Future Group in a mega deal involving a consideration of Rs 24,713 crore. (Bloomberg)

Global investment firm KKR has proposed to invest Rs 5,550 crore in Reliance Retail Ventures Ltd (RRVL), a subsidiary of Reliance Industries, valuing Reliance Retail at a pre-money equity value of Rs 4.21 lakh crore. KKR’s investment will translate into a 1.28 per cent equity stake in RRVL on a fully diluted basis.

The deal marks the second investment by KKR in a subsidiary of Reliance Industries, following a Rs 11,367 crore investment in Jio Platforms announced earlier this year.

Technology investment firm Silver Lake recently decided to invest Rs 7,500 crore ($1 billion) in Reliance Retail, valuing RRVL at a pre-money equity value of Rs 4.21 lakh crore. Silver Lake’s investment will translate into a 1.75 per cent equity stake in RRVL on a fully diluted basis. This is the second billion dollar investment by Silver Lake in a Reliance Industries subsidiary after the $1.35 billion investment in Jio Platforms announced earlier this year.

Reliance Retail operates India’s largest retail business serving close to 640 million footfalls across its 12,000 stores nationwide. “We look forward to working with KKR’s global platform, industry knowledge and operational expertise across our digital services and retail businesses,” said RIL chairman & managing director Mukesh Ambani.

Explained

KKR’s 2nd investment in an RIL arm

The deal marks the second investment by KKR in a subsidiary of Reliance Industries, following a Rs 11,367 crore investment in Jio Platforms announced earlier this year. Silver Lake recently decided to invest Rs 7,500 crore ($1 billion) in Reliance Retail, valuing RRVL at a pre-money equity value of Rs 4.21 lakh crore.

“Reliance Retail’s vision is to galvanize the Indian retail sector through an inclusive strategy serving millions of customers by empowering millions of farmers and 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,” RIL said. KKR has $222 billion in assets under management as of June 30, 2020 and a long history of building leading global enterprises, including many companies at the forefront of technology and digital transformation including in areas of consumer retail and eCommerce, such as investments in Epic Games, OutSystems, Internet Brands, Go-jek and Voyager Innovations.

Henry Kravis, co-founder and co-CEO of KKR, said, “Reliance Retail’s new commerce platform is filling an important need for both consumers and small businesses as more Indian consumers move to shopping online and the company offers tools for Kiranas to be a critical part of the value chain.”

RRVL reported a consolidated turnover of Rs 1,62,936 crore and a net profit of Rs 5,448 crore for the year ended March 31, 2020.

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