Reliance Industries (RIL) on Thursday announced that Mubadala Investment Company (Mubadala), the Abu Dhabi-based sovereign investor, will invest Rs 6,247.5 crore into its retail arm.
The investment values Reliance Retail at a pre-money equity value of Rs 4.285 lakh crore. Mubadala’s investment will translate into a 1.40 per cent equity stake in Reliance Retail Ventures on a fully diluted basis, RIL said in a statement after market hours.
This marks the second significant investment by Mubadala in a RIL subsidiary after the $1.2 billion investment in Jio Platforms announced earlier this year. After the latest investment, RIL has now raised almost Rs 25,000 crore in its retail subsidiary.
“I am happy to welcome Mubadala as a valued investor in Reliance Retail Ventures. We value the partnership with a knowledge-rich organisation like Mubadala... Mubadala’s investment and guidance will be an invaluable support in this journey,” Mukesh Ambani, chairman and managing director of RIL, said while commenting on the latest transaction.
Ahead of the announcement, shares of RIL settled with a marginal loss at Rs 2,225.05 on the BSE. The RIL scrip now has a market cap of more than Rs 15 lakh crore.
“RIL has monetised $26 billion in assets year-to-date in telecom, retail and energy. While asset monetisation may continue, we see capital allocation, recovery in energy margins and execution in retail being key to outperformance,’’ a note by Morgan Stanley said.
The brokerage has an overweight rating on the stock. Its analysts added that with industry consolidation picking up pace in telecom, retail, and global refining, RIL will emerge stronger post Covid-19 and margins will surprise as pricing power rises.
“We are pleased to deepen our relationship with Reliance Industries through this investment in Reliance Retail Ventures.
“Their vision is the inclusive transformation of India’s consumer economy through the power of digitisation, creating opportunities and market access for millions of small businesses across the country, and we are committed to supporting the company’s continuing development,’’ Khaldoon al Mubarak, managing director and group CEO, Mubadala Investment Company, said.
