On Tuesday, Reliance Industries Ltd, headed by Mukesh Ambani, said that a subsidiary of the Abu Dhabi Investment Authority (ADIA) will invest $5,512.50 crore in its retail arm for a 1.2 percent stake. “Reliance Retail Ventures Ltd (RRVL) values this investment at a pre-money equity valuation of ⁇ 4,285 lakh crore. The investment of ADIA would on a completely diluted basis convert into a 1.2 percent equity interest in RRVL,” the company said in the regulatory filing.
RRVL raised 37,710 crore with this investment from seven global investors, including Silver Lake, KKR, General Atlantic, Mubadala, GIC, TPG and ADIA.
Founded in 1976, ADIA is a globally diversified investment institution which, through a strategy centered on long-term value development, prudently invests funds on behalf of the Government of Abu Dhabi.
Hamad Shahwan Aldhaheri, executive director of ADIA’s private equity department, commented on the investment: “Reliance Retail has rapidly established itself as one of India’s leading retail companies and is well-positioned for further growth by leveraging both its physical and digital supply chains.”
He added, “This investment is in line with our strategy to invest in Asia’s market-leading enterprises linked to consumption-driven growth in the area and rapid technological advancement.”
“The investment by ADIA is further recognition of the success and potential of Reliance Retail and the inclusive and disruptive business model of Modern Commerce that it is introducing,” said Mukesh Ambani, chairman and managing director of Reliance Industries.
“We are pleased with the current investment and ongoing support of ADIA and expect to benefit from its solid track record of more than four decades of global value formation,” Ambani added.
The company said in a statement last week, Abu Dhabi-based sovereign wealth fund Mubadala collected 1.4 percent stake in RRVL for ⁇ 6,247.5 crore.
Reliance Retail Limited, a subsidiary of RRVL, has the biggest, fastest-growing, and most profitable retail sector in India. The company said it serves close to 640 million footfalls in 12,000 shops in India.
Through its Latest Commerce strategy, Reliance Retail has introduced a revolutionary digitalization of small and unorganised merchants and is committed to extending the network to more than 20 million of these merchants. This will enable merchants to use technological resources and an efficient supply chain system to provide their own customers with a superior value proposition, “the company added.”
For the year ended March 31, 2020, RRVL announced a consolidated turnover of Rs162,936 crore and a net profit of Rs 5,448 crore.