Reliance Industries announced that they have acquired two investments for their retail arm Reliance Retail Ventures Limited. The global investment firm GIC will invest ₹ 5,512.5 crores into its retail arm Reliance Retail Ventures Limited (RRVL) and the other investment would come from the investment firm TPG, who will invest ₹ 1,837.5 crores.
The ₹ 5,512.5 crore investment of GIC would earn them a 1.22 percent equity stake in the company and TPG’s ₹ 1,837.5 crore investment would mean that they would have a 0.41 percent equity stake in RRVL. Since September 9, Reliance Industries has managed to sell a 7.28 percent stake in the retail unit for a total of ₹ 32,297.50 crores.
India’s richest man, Mukesh Ambani who is also the chairman and the managing director of the Reliance Industries Ltd is going to launch the Reliance’s retail chain and is eyeing to bring down popular retail giants like Amazon and Flipkart who dominate the Indian market. These recent investments help Reliance to gain power in the segment and with their acquisition of Futures Retail chain, they are now capable of taking over the segment. The investment values RRVL at a pre-money equity value of ₹ 4.285 lakh crore.
Mukesh Ambani, announcing the latest development said, “It gives me great pleasure to welcome GIC to the Reliance Retail family. I am delighted that GIC, with its track record of close to four decades of successful long-term value investing across the world, is partnering with Reliance Retail in its mission to transform the Indian retail landscape. GIC’s global network and track record of long-term partnerships will be invaluable to the transformation story of Indian Retail. This investment is a strong endorsement of our strategy and India’s potential.”
Lim Chow Kiat, Chief Executive Officer, GIC, said, “GIC is pleased to partner with Reliance through this new investment, which will enable the company to position Reliance Retail for the strong secular growth in India’s retail market. We believe Reliance Retail will continue to use its extensive supply chain and store networks, as well as strong logistics and data infrastructure, to add value to its customers and shareholders.”
The investment firm TPG had already made an investment in another subsidiary of Reliance Industries earlier. They had made a ₹ 4,546.8 crore investment in Jio Platforms which was announced earlier this year. The investment in RRVL marks for their second investment in Reliance Industries.
Reliance Retail Limited, a subsidiary of RRVL is India’s largest and fastest-growing retail chain. The retail unit attracts over 640 million footfalls in their 12,000 stores that are spread all over the nation.
GIC Private Limited, which is also known as the Government of Singapore Investment Corporation, is a sovereign wealth fund established by the Government of Singapore in 1981 to manage Singapore’s foreign reserves. Their network consists of 10 offices in key financial capitals of the world and they make international investments in developed market equities, emerging market equities, nominal bonds and cash, inflation-linked bonds, private equity, and real estate. They aim to preserve and enhance the international purchasing power of the reserves.
TPG Capital is an American investment company which is also known as Texas Pacific Group. The group focuses on leveraged buyouts and growth capital. They manage investment funds in growth capital, venture capital, public equity, and debt investments. The group also invests in a wide array of companies from several sectors like consumer/retail, media and telecommunications, industrials, technology, travel, leisure, and health care.