Abu Dhabi Investment Authority (ADIA) is reportedly considering a substantial investment of $600 million in Reliance Retail, owned by Mukesh Ambani's Reliance Industries. ADIA already holds a 1.2% stake in Reliance Retail Ventures since October 2020. Recently, global investment firm KKR increased its stake in RRVL after a full subscription amount of Rs 2,069.50 crore. Earlier in September, Qatar Investment Authority invested Rs 8,278 crore for a 1% stake. Reliance Retail raised significant funds in 2020, with a 10.09% stake valued at Rs 47,265 crore. Reliance Retail, expanding aggressively, achieved over a billion transactions and a user base of 249 million, contributing 18% to FY23 revenue.
The Abu Dhabi Investment Authority (ADIA) is contemplating a substantial investment of $600 million in Reliance Retail, the retail arm of Mukesh Ambani's conglomerate, Reliance Industries. This move signifies ADIA's intent to expand its existing stake in the retail empire, according to a report by the Economic Times.
ADIA had previously entered the picture in October 2020 when it invested in Reliance Retail Ventures, acquiring a 1.2% stake for Rs 5,512.50 crore. The current consideration of an additional $600 million investment showcases ADIA's continued interest and confidence in the growth prospects of Reliance Retail.
In recent developments, Reliance Retail Ventures Limited (RRVL), the retail arm of Reliance Industries Limited (RIL), received a complete subscription amount of Rs 2,069.50 crore from the global investment firm KKR last week. In response, KKR's shareholding in RRVL increased from 1.17% to 1.42%.
Adding to the string of investments, Qatar Investment Authority (QIA) infused Rs 8,278 crore for about a 1% stake in RRVL earlier this month. This transaction was carried out at a valuation of Rs 8.278 lakh crore (USD 100 billion), highlighting the substantial valuation accorded to Reliance Retail.
In the notable fundraising efforts of 2020, RRVL successfully raised Rs 47,265 crore (approximately $6.4 billion) from global private equity funds. This funding round resulted in a 10.09% stake being acquired, valuing the company at over Rs 4.2 lakh crore. At that time, this marked the largest fundraising exercise in the sector.
Diverse investment sources participated in the fundraising initiative, including prominent entities such as Silver Lake, KKR, Mubadala, Abu Dhabi Investment Authority, GIC, TPG, General Atlantic, and Saudi Arabia's Public Investment Fund. The valuation at that juncture was around $57 billion.
Reliance Retail Ventures Limited has been executing an aggressive expansion strategy, involving acquisitions of companies and securing franchise rights for leading international brands in India. Additionally, it has focused on enhancing infrastructure, including the acquisition of the India business of German retail major Metro Cash and Carry.
The annual report of Reliance Industries highlights the remarkable achievements of Reliance Retail, reaching a significant milestone of surpassing a billion transactions. The registered user base has surged to an impressive 249 million. Operating through a network of over 18,500 stores and digital commerce platforms, Reliance Retail spans various categories, including grocery, consumer electronics, fashion & lifestyle, and pharma consumption baskets.
In the fiscal year 2023, the digital commerce and new commerce businesses of Reliance Retail contributed 18% to its revenue, which amounted to Rs 2.60 lakh crore. This ongoing series of investments and strategic initiatives underscore the dynamism and growth potential within Reliance Retail. The interest from global investment firms signals confidence in the robustness of India's retail landscape and Reliance Retail's position as a key player in this dynamic market.
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