Mubadala, a sovereign wealth fund headquartered in Abu Dhabi, acquired a 1.4 percent stake in Reliance Retail Ventures (RRVL), a Reliance Industries Limited subsidiary, for 6,247.5 crore, the company said in a statement.
At a pre-money equity valuation of ⁇ 4.285 lakh crore, the investment values Reliance Retail. Mubadala ‘s investment would convert on a completely diluted basis into a 1.40% equity stake in RRVL, “RIL claimed in its regulatory filing.”
This marks Mubadala ‘s second major investment in a subsidiary of Reliance Industries after the $1.2 billion US investment revealed earlier this year in Jio Platforms.
RRVL ‘s subsidiary Reliance Retail Limited operates India’s fastest growing and most profitable retail company serving nearly 640 million footfalls across its approximately 12,000 stores nationwide.
“Commenting on the investment,” I am pleased to welcome Mubadala as a valued investor in Reliance Retail Ventures, “said Mukesh Ambani, Chairman and Managing Director of Reliance Industries. We appreciate the partnership with a knowledge-rich organisation like Mubadala and acknowledge their faith in our mission to strengthen, through the power of technology, the core of India’s retail sector-the millions of small retailers, merchants and shopkeepers. The investment and encouragement of Mubadala will be an invaluable help on this journey.
“Through this investment in Reliance Retail Ventures, Khaldoon Al Mubarak, Managing Director and Group CEO, Mubadala Investment Company, said,” We are pleased to deepen our relationship with Reliance Industries. Their vision is the inclusive transformation of the consumer economy of India through the power of digitization, creating opportunities and market access for millions of small businesses across the country.
After the Abu Dhabi Investment Authority, Mubadala is Abu Dhabi’s second-largest state investor, controlling approximately $240 billion in assets.
Regulatory and other customary approvals are subject to the deal.
Morgan Stanley was Reliance Retail’s financial advisor, and Cyril Amarchand Mangaldas and Davis Polk & Wardwell were legal advisors.
After Silver Lake’s additional 1,875 crores and earlier ⁇ 7,500-crore investment for a 1.75 percent stake, KKR’s ⁇ 5,550-crore investment for a 1.28 percent stake, and General Atlantic’s 3,675-crore investment for a 0.84 percent stake, this is cheque number 5 for Reliance Retail.
Since September, Reliance has earned 24,847.5 crore by selling 5.65 percent of its retail arm.
Following the sale-down of its Jio Platforms digital unit, the focus of Reliance has shifted to retail with the acquisition by multinational private equity firms / strategic investors of Potential Group companies and investments.
All 13 investors who poured a combined 1.52 lakh crore in Jio Platforms were given an opportunity to explore investing in the retail unit.
As the Indian oil-to-telecoms conglomerate has been seeking to broaden its e-commerce activities to compete against Walmart’s Flipkart and Amazon.com ‘s Indian business, Ambani’s drive to pursue investment in its retail business comes as the Indian oil-to-telecoms conglomerate has been looking to broaden its e-commerce operations to compete against Walmart’s Flipkart and Amazon.com ‘s Indian business.