KKR To Invest Rs 5,550 Crore In Reliance Retail Ventures For A 1.28% Stake
KKR & Co. will buy a Rs 5,550 crore ($754.28 million) stake in Reliance Industries Ltd.’s retail business, bolstering Mukesh Ambani’s plan to raise funds for his consumer operations.
KKR will pick up 1.28% stake in Reliance Retail Ventures Ltd., the holding arm for Ambani's retail business, according to an exchange filing by parent Reliance Industries Ltd. The deal pegs the pre-investment equity valuation of Reliance Retail at Rs 4.21 lakh crore, or $58.55 billion. The post-investment valuation stands at Rs 4.34 lakh crore, $59 billion.
Earlier this month, Silver Lake had agreed to invest Rs 7,500 crore for a 1.75% stake in the retail holding arm at a valuation of Rs 4.21 lakh crore. Amazon is also in talks to invest $20 billion in the retail unit, Bloomberg reported.
Reliance Retail Ventures has so far raised Rs 24,700 crore by way of private placement to Reliance Industries, Silver Lake and KKR.
Ambani, Asia's richest man, 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.
Like Silver Lake, KKR also invested in Jio Platforms Ltd., Reliance's digital and telecom business, picking 2.32% for Rs 11,367 crore.
Investments in the retail unit come as Ambani is on track to increase dominance after acquisition of Future Group's retail unit is completed.
Reliance Retail already 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.
According to a Morgan Stanley report, with private equity investments in both Jio Platforms and Reliance Retail Ventures benchmarking valuations, markets would expect RIL to separately list these companies eventually.