Reliance Industries Limited and Reliance Retail Ventures Limited announced on Wednesday that American buyout firm KKR has decided to invest ₹5,550 crore in Reliance Retail Ventures Ltd (RRVL), a subsidiary of Reliance Industries Ltd (RIL), for a 1.28% stake, RIL said in a filing with stock exchanges. The capital infusion by KKR will transform into a 1.28% equity stake in RRVL, which will be fully diluted.
This is the second deal by Reliance Retail in 2 weeks
Earlier this month, Private equity giant Silver Lake Partners picked 1.75 percent stake in the retail unit of India’s Reliance Industries Ltd (RIL) for Rs 7,500 crore. This investment boosted the valuation of Reliance Retail to Rs 4.21 lakh crore.
This is the second billion dollar investment in Reliance industries subsidiary by the Private equity giant, after the Silver Lake invested $1.35 billion in Jio Platforms earlier this year.
RIL, an oil-to-telecom conglomerate, is expanding its retail business and getting the biggest investors from different parts of the world on-board to take on rivals such as Amazon India and Walmart-owned Flipkart in India’s huge market.
“I am pleased to welcome KKR as an investor in Reliance Retail Ventures as we continue our onward march to growing and transforming the Indian Retail ecosystem for the benefit of all Indians. KKR has a proven track record of being a valuable partner to industry-leading franchises and has been committed to India for many years. We look forward to working with KKR’s global platform, industry knowledge and operational expertise across our digital services and retail businesses,” said Mukesh Ambani, Chairman and Managing Director of Reliance Industries.
Morgan Stanley acted as financial advisor to Reliance Retail and Deloitte Touche Tohmatsu India LLP acted as financial advisor to KKR for this deal.
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. We are thrilled to support Reliance Retail in its mission to become India’s leading omnichannel retailer and ultimately to build a more inclusive Indian retail economy.”
Founded in 1976, KKR has $222 billion in assets under management as of June 30, 2020. KKR is a global investment firm that manages investments across multiple asset classes, including private equity, energy, infrastructure, health care, real estate, credit and hedge funds. The Company’s business offers a range of investment management services to its fund investors, and provides capital markets services to its firm, its portfolio companies and third parties. The Company conducts its business with offices across the world, providing it with a global platform for sourcing transactions, raising capital and carrying out capital markets activities. Through KKR’s Private Markets segment, KKR manages and sponsors a group of private equity funds and co-investment vehicles. The Company operates through four segments: Private Markets, Public Markets, Capital Markets and Principal Activities.
Reliance Retail is the retail initiative of the group and is central to our consumer facing businesses. It has in a short time forged strong and enduring bonds with millions of consumers by providing them unlimited choice, outstanding value proposition, superior quality and unmatched experience across all its stores.
Reliance Retail has adopted a multi-prong strategy and operates a chain of neighborhood stores, supermarkets, wholesale cash & carry stores, specialty stores and online stores and has democratized access to a variety of products and services across diverse segments for Indian consumers.
Reliance Retail has the distinction of being the largest retailer in the country. Reliance Retail’s commitment to “bettering the lives” has been embodied in its pursuit to make a difference in social socio-economic issues in India. The initiative has brought millions of farmers and small producers to the forefront of the retail revolution by partnering with them for growth.