India: ADIA to invest $750m for 1.2% stake in Reliance Retail

Photo: Reuters

Reliance Industries Ltd, led by Mukesh Ambani, on Tuesday, said that a subsidiary of the Abu Dhabi Investment Authority (ADIA) will invest ₹5,512.50 crore for 1.2% stake in its retail arm.

“This investment values Reliance Retail Ventures Ltd (RRVL) at a pre-money equity value of ₹ 4.285 lakh crore. ADIA’s investment will translate into a 1.2% equity stake in RRVL on a fully diluted basis,” the company said in a regulatory filing.

With this investment, RRVL has raised ₹ 37,710 crore from seven global investors including Silver Lake, KKR, General Atlantic, Mubadala, GIC, TPG and ADIA.

Established in 1976, ADIA is a globally-diversified investment institution that prudently invests funds on behalf of the Government of Abu Dhabi through a strategy focused on long-term value creation.

Commenting on the investment, Hamad Shahwan Aldhaheri, executive director of the private equities department at 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.”

He further added, “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.”

Mukesh Ambani, chairman and managing director of 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.”

“We are delighted with ADIA’s current investment and continued support and hope to benefit from its strong track record of over four decades of value creation globally,” Ambani added.

Last week, Abu Dhabi-based sovereign wealth fund Mubadala picked up 1.4 % stake in RRVL for ₹6,247.5 crore, the company said in a statement.

Spread across the country, Reliance Retail Limited a subsidiary of RRVL, operates India’s largest, fastest-growing and most profitable retail business. It is serving close to 640 million footfalls across 12,000 stores in India, the company said.

“Reliance Retail, through its New Commerce strategy, has started a transformational digitalization of small and unorganised merchants and is committed to expanding the network to over 20 million of these merchants. This will enable the merchants to use technology tools and an efficient supply chain infrastructure to deliver a superior value proposition to their own customers,” the company further added.

RRVL reported a consolidated turnover of ₹ 162,936 crore and a net profit of ₹ 5,448 crore for the year ended March 31, 2020.

This article was first published on livemint.com

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.