Global investment firm KKR will invest Rs 2,069.50 crore in Reliance Retail Ventures, through an affiliate. This investment values RRVL at a pre-money equity value of Rs 8.361 lakh crore, which makes it among the top four companies by equity value in the country.
KKR’s follow-on investment will translate into an additional equity stake of 0.25% in RRVL on a fully-diluted basis. This, combined with its stake from its investment of Rs 5,550 crore in RRVL in 2020, will take its total stake to 1.42% on a fully-diluted basis. The previous fund-raising round by RRVL in 2020, from various global investors, was for an aggregate amount of Rs 47,265 crore and was done at a pre-money equity value of Rs 4.21 lakh crore.
KKR’s follow-on investment in RRVL furthers its relationship with Reliance Industries. In addition to its investment in RRVL, KKR is also an investor in another RIL subsidiary, Jio Platforms. KKR’s investment comes primarily from its Asian Fund IV. The transaction is subject to regulatory and other customary approvals.
RRVL, through its subsidiaries and associates, operates one of India’s largest retail business with an integrated omni-channel network of over 18,500 stores and digital commerce platforms across grocery, consumer electronics, fashion & lifestyle and pharma consumption baskets. It has digitised more than 3 million small and unorganised merchants. This will enable these merchants to use technology tools and an efficient supply chain infrastructure to deliver a superior value proposition to their own customers.
Speaking about KKR’s investment, Isha Mukesh Ambani, Director, Reliance Retail Ventures said, “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. We look forward to continued engagement with KKR and to benefit from their global platform, industry knowledge and operational expertise, in our journey towards driving transformation of the Indian retail sector.”
Joe Bae, Co-CEO, KKR, added that, “Throughout our investment period in Reliance Retail, we have been impressed by the company’s vision and extensive work to empower retailers across India through digitalization, as well as by its resilience and performance in spite of the pandemic and other disruptions.”
Gaurav Trehan, Head of Asia Pacific Private Equity and Head of India, KKR, pointed out that, “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.”
Morgan Stanley acted as financial advisor to Reliance Retail Ventures and Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as legal counsels.