Reliance Retail Ventures (RRVL) announced on Monday that the global investment firm KKR, through an affiliate, will invest Rs 2,069.50 crore into RRVL, a subsidiary of Reliance Industries Limited.
This investment values RRVL at a pre-money equity value of Rs 8.361 lakh crore, which makes it among the top four companies by equity value in the country.
KKR’s follow-on investment will translate into an additional equity stake of 0.25 per cent in RRVL on a fully diluted basis. This, combined with its stake from its investment of Rs 5,550 crore in RRVL in 2020, will take its total equity stake in RRVL to 1.42 per cent on a fully diluted basis.
The previous fund-raise round by RRVL in 2020 from various global investors of an aggregate amount of Rs 47,265 crore was done at a pre-money equity value of Rs 4.21 lakh crore.
Isha Mukesh Ambani, Director, Reliance Retail Ventures, said, “We are pleased to receive continued support from KKR as an investor in Reliance Retail Ventures Limited. We highly value our deepening partnership with KKR, and their latest investment in RRVL after their previous investment further reinforces their strong belief in RRVL’s vision and capabilities. We look forward to continued engagement with KKR and to benefit from their global platform, industry knowledge, and operational expertise, in our journey towards driving transformation of the Indian retail sector.”
RRVL, through its subsidiaries and associates, operates India’s largest, fastest-growing, and most profitable retail business serving 267 million loyalty customers with an integrated omni-channel network of over 18,500 stores and digital commerce platforms across grocery, consumer electronics, fashion & lifestyle, and pharma consumption baskets.
RRVL’s vision is to galvanize the Indian retail sector through an inclusive strategy serving millions of customers, empowering micro, small, and medium enterprises (MSMEs), and working closely with global and domestic companies as a preferred partner, to deliver immense benefits to Indian society, while protecting and generating employment for millions of Indians. RRVL, through its New Commerce business, has digitized more than 3 million small and unorganized merchants. This will enable these merchants to use technology tools and an efficient supply chain infrastructure to deliver a superior value proposition to their own customers.
Joe Bae, Co-CEO, KKR, said, “We are pleased to extend our relationship with Reliance Retail Ventures Limited. Throughout our investment period in Reliance Retail, we have been impressed by the company’s vision and extensive work to empower retailers across India through digitalization, as well as by its resilience and performance in spite of the pandemic and other disruptions. We look forward to continuing to work alongside the Reliance Retail team to support the company’s mission to build a more inclusive Indian retail economy.”
Founded in 1976, KKR has approximately USD 519 billion in assets under management as of June 30, 2023. KKR has a long history of building leading global enterprises that are at the forefront of technology and digital transformation, including in the areas of consumer retail and eCommerce, as well as a track record of supporting leading corporations in India. KKR’s follow-on investment in RRVL furthers its relationship with Reliance Industries Limited. In addition to its investment in RRVL, KKR is also an investor in Jio Platforms, a leading digital services platform and a subsidiary of Reliance Industries.
Gaurav Trehan, Head of Asia Pacific Private Equity and Head of India, KKR, added, “Reliance Retail is a true corporate leader and innovator in India, and its differentiated model has the potential to digitalize and transform the country’s retail industry. We are pleased to have the opportunity to continue collaborating with this team and pursue the growth opportunities ahead.”
KKR’s investment comes primarily from its Asian Fund IV. The transaction is subject to regulatory and other customary approvals.
Morgan Stanley acted as financial advisor to Reliance Retail Ventures Limited and Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as legal counsels.