Abu Dhabi Investment Authority to invest Rs 5,512.50 crore in Reliance Retail

By: |
October 7, 2020 7:15 AM

The investment in Reliance Retail by ADIA comes shortly after it invested Rs 5,683.50 crore in Jio Platforms for 1.16% stake.

Even though Reliance Retail is ahead of its peers when it comes to digitisation of its services, it will need to make large investments to consolidate the backend and digitise operations to take on Amazon and Flipkart.Even though Reliance Retail is ahead of its peers when it comes to digitisation of its services, it will need to make large investments to consolidate the backend and digitise operations to take on Amazon and Flipkart.

Reliance Industries (RIL) on Tuesday said that a wholly-owned subsidiary of Abu Dhabi Investment Authority (ADIA) will invest Rs 5,512.50 crore in its subsidiary Reliance Retail Ventures (RRVL) for a 1.20% stake. The stake sale values Reliance Retail at Rs 4.285 lakh crore. The investment in Reliance Retail by ADIA comes shortly after it invested Rs 5,683.50 crore in Jio Platforms for 1.16% stake.

The investment in RRVL by ADIA is the seventh investment in RIL’s retail arm within four weeks. Silver Lake, KKR, General Atlantic, Mubadala, GIC and TPG have been the other investors so far. Thus, within four weeks the retail firm has sold 8.51% stake raising a total fund of nearly Rs 37,710 crore.

Mukesh Ambani, chairman and managing director, Reliance Industries, said, “The investment by ADIA is a further endorsement of Reliance Retail’s performance and potential and the inclusive and transformational new commerce business model that it is rolling out.”

Hamad Shahwan Aldhaheri, executive director (private equities department), ADIA, said, “Reliance Retail has rapidly established itself as one of the leading retail businesses in India and, by leveraging both its physical and digital supply chains, is strongly positioned for further growth. This investment is consistent with our strategy of investing in market leading businesses in Asia linked to the region’s consumption-driven growth and rapid technological advancement.”

Even though Reliance Retail is ahead of its peers when it comes to digitisation of its services, it will need to make large investments to consolidate the backend and digitise operations to take on Amazon and Flipkart.

Reliance Retail has acquired Future Group’s retail business, which has a portfolio of strong retail assets across grocery, fashion and lifestyle. This would add around 1,300 stores to its current 800 stores in grocery and 440 stores in fashion and lifestyle, thus taking its total network to 2,400. With the acquisition of Future Group’s assets, Reliance Retail’s share in the organised retail market is expected to be in the region of 15% after this merger and the retailer now accounts for nearly 10% sales of top FMCG firms.

Reliance Retail has already marked its entry into the e-commerce business with the launch of JioMart in tie-up with Facebook’s popular platform WhatsApp to take on the likes of big players like Amazon and Flipkart. JioMart has already been launched in around 200 cities.

Earlier, Jio Platforms, another arm of RIL has attracted investments from 14 global investment firms totalling Rs 1,52,055.45 crore for 32.97% stake.

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