General Atlantic To Invest Rs 3,675 Crore In Reliance Retail Ventures

General Atlantic will buy a stake worth Rs 3,675 crore in Reliance Industries Ltd.’s retail business as Asia’s richest man continues to raise funds to bolster dominance of his consumer operations.

The global growth equity firm will pick up a 0.84% stake in Reliance Retail Ventures Ltd., the holding arm for Mukesh Ambani’s retail business, according to an exchange filing by parent Reliance Industries. The deal pegs the pre-investment equity valuation of Reliance Retail at Rs 4.28 lakh crore.

The transaction is priced at Rs 682.25 apiece, same at which Reliance Retail Ventures issued shares to parent Reliance Industries through a private placement in September, raising Rs 11,650 crore. The post-acquisition value of the retail arm, therefore, comes to Rs 4.37 lakh crore, or $59.3 billion at the current exchange rate of Rs 73.85 per dollar.

Earlier this month, Silver Lake and KKR & Co. had agreed to invest Rs 7,500 crore and Rs 5,550 crore, respectively, for a 1.75% and 1.28% stake in the retail holding arm.

Ambani is replicating funding blitz for the retail unit after selling stakes in Jio Platforms as investors including Facebook Inc. and Google LLP bet on his efforts to build a technology giant that offers data, content and commerce. Besides Silver Lake and KKR, General Atlantic had invested Rs 6,598 crore in Reliance’s telecom business.

Reliance Industries has so far sold 3.82% stake in its retail arm, raising Rs 16,725 crore from the three private equity investors. After General Atlantic's deal, Reliance Industries holds nearly 91% in the retail holding arm. The money will be used to fund the acquisition of retail and wholesale assets of Future Group, following which Reliance’s retail unit will further increase its dominance.

Reliance Retail has a total of 11,784 stores across consumer electronics, grocery and general merchandise and fashion & lifestyle. It reported a consolidated turnover of Rs 1,62,936 crore ($21.7 billion) and net profit of Rs 5,448 crore ($726.4 million) for the year ended March 31, 2020.

Acquisition of Future Group’s retail and logistics business for Rs 27,513 crore will add 1,736 Big Bazaar and other stores covering close to 28.3 million square feet of retail area across various grocery and fashion segments.