KKR Hikes Stake In Reliance Retail To 1.42 Per Cent, To Invest Rs 2,069 Crore

Last week, Reliance received Rs 8,278 crore from Qatar Investment Authority for around 1 per cent stake in Reliance Retail Ventures Ltd at a valuation of Rs 8.278 lakh crore

The investment is at "a pre-money equity value of Rs 8.361 lakh crore (around $100.87 billion), RIL and KKR said in a joint statement.

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Global investment firm KKR will invest Rs 2,069.50 crore in Reliance Retail Ventures Ltd for a 0.25 per cent additional stake of the retailer at a valuation of about Rs 8.36 lakh crore, Mukesh Ambani-led Reliance Industries Ltd (RIL) said on Monday. Following this investment, KKR's shareholding in Reliance Retail, the holding firm of the retail business of RIL, will increase to 1.42 per cent from 1.17 per cent.

According to a joint statement, the investment is at "a pre-money equity value of Rs 8.361 lakh crore (around $100.87 billion)". The deal placed RRVL "among the top four companies by equity value in the country," it added.

Shares of Reliance Industries opened higher on Tuesday early trade, a day after KKR announced to have hiked its stake in Reliance Retail Ventures. The KKR deal makes Reliance Retail Ventures one of the top four Indian companies in terms of equity value in the country. However, RIL stocks slipped into the red in the later part of the day. At 11.35 am, RIL was trading at Rs 2,453.70 apiece, down 0.84 per cent on the BSE on Tuesday.

KKR’s follow-on investment through an affiliate 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," it added.

Isha Ambani, director, Reliance Retail Ventures, said, "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 the transformation of the Indian retail sector."

KKR’s investment comes primarily from its Asian Fund IV, and the transaction is subject to regulatory and other customary approvals.

KKR Co-CEO Joe Bae said: "We are pleased to extend our relationship with RRVL. 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 digitalisation as well as by its resilience and performance in spite of the pandemic and other disruptions".

Last week, Reliance received Rs 8,278 crore from Qatar Investment Authority (QIA) for around 1 per cent stake in Reliance Retail Ventures Ltd (RRVL) at a valuation of Rs 8.278 lakh crore ($100 billion).

Earlier in 2020, RRVL had raised Rs 47,265 crore (around $6.4 billion) from global private equity funds for a 10.09 per cent stake, valuing the company at more than Rs 4.2 lakh crore.

This was the largest fundraising exercise in the sector at that time. The company had raised funds from Silver Lake, KKR, Mubadala, Abu Dhabi Investment Authority, GIC, TPG, General Atlantic and Saudi Arabia’s Public Investment Fund at a valuation of around $57 billion at that time.