Reliance Industries Ltd (RIL) on Wednesday announced a cumulative investment of Rs 5,549 crore in its retail arm.
While global private equity firm General Atlantic will bring in Rs 3,675 crore for a 0.84 per cent stake in Reliance Retail Ventures Ltd (RRVL), the co-investors of Silver Lake will invest an additional Rs 1,875 crore into RRVL.
This comes after Silver Lake brought in Rs 7,500 crore for a 1.75 per cent stake and KKR, Rs 5,550 crore for a 1.28 per cent shareholding.
The transaction values Reliance Retail at a pre-money equity value of Rs 4.285 lakh crore.
In a late evening announcement, RIL said that the co-investors of Silver Lake will invest an additional Rs 1,875 crore into RRVL. This brings the aggregate investment by Silver Lake and its co-investors in RRVL to Rs 9,375 crore, which will translate into a 2.13 per cent equity stake in RRVL on a fully diluted basis.
With the latest investments, RIL has raised Rs 18,600 crore in its retail arm. All the 13 investors, who had put in a combined Rs 1.52 lakh crore in Jio Platforms, have been offered a chance to explore investing in the retail unit.
Reuters reported that the Abu Dhabi state fund Mubadala Investment Co is in advanced talks to invest up to $1 billion in RRVL. Mubadala had invested around $1.2 billion in Jio Platforms.
For General Atlantic, this marks its second investment in a RIL subsidiary following a Rs 6,598.38 crore investment in Jio Platforms earlier this year.
Reliance is expected to plough the proceeds from these transactions into the retail business. It comes at a time rivals such as Amazon and Walmart-controlled Flipkart are also looking to expand their presence in India’s retail market.
The Tatas have been in the news with reports saying that Walmart is in talks with the conglomerate to invest in its “super-app”.
Reliance Retail, a subsidiary of RRVL, operates about 12,000 stores in nearly 7,000 towns with 640 million footfall across the core categories of grocery, consumer electronics and apparel.
The company reported revenues of Rs 1.63 lakh crore in the last financial year.