Qatar Investment Authority (QIA) is investing nearly 1 per cent in Reliance Retail Ventures Ltd (RRVL) for Rs 8,278 crore, valuing the retail arm of Reliance Industries Ltd at around Rs 8.3 lakh crore.
This is almost twice the valuation that RRVL commanded when parent RIL sold 10.09 per cent in the company to a clutch of overseas investors three years ago.
QIA’s investment is worth 0.99 per cent in RRVL on a fully diluted basis, Reliance said on Wednesday.
In 2020, Reliance raised Rs 47,265 crore for RRVL from various global investors for an aggregate amount of Rs 47,265 crore.
The transaction was done at a pre-money equity value of Rs 4.21 lakh crore. The investors included KKR, Silver Lake, GIC, Abu Dhabi Investment Authority, TPG, General Atlantic, Mubadala, and Saudi Arabia’s Public Investment Fund.
RRVL represents the organised retail business of Reliance. It posted revenues of Rs 260,364 crore in 2022-23 and Rs 69,948 crore in the first quarter ended June 30, 2023. Net profits of consolidated Reliance Retail during these periods stood at Rs 9,181 crore and Rs 2,448 crore respectively.
The investment by QIA has again raised questions on when RIL would list RRVL and Jio Platforms which represents its digital services business. Reliance chairman Mukesh Ambani may give an indication of his plans at the company’s annual general meeting on Monday.
“We are delighted to welcome QIA as an investor in RRVL. We look forward to benefitting from QIA’s global experience and strong track record of value creation as we further develop RRVL into a world class institution, driving transformation of the Indian retail sector. The investment by QIA is a strong endorsement of a positive outlook towards Indian economy and Reliance’s retail business model, strategy and execution capabilities,’’ Isha Ambani, director, RRVL said .
While the announcement was made after market hours, the RIL stock closed with small gains of 0.16 per cent at Rs 2,523.15 on the BSE.
It came on a day, Reliance Retail Ventures said it is planning to raise Rs 3,048 crore through an infrastructure investment trust (InvIT) of its warehousing and logistics assets.
RRVL is the sponsor of the InvIT called Intelligent Supply Chain Infrastructure Trust while Axis Trustee Services is the trustee.
The funds will be raised through the private placement route, according to an RRVL filing with the Securities and Exchange Board of India.
The InvIT has entered into an share purchase agreement (SPA) with RRVL to acquire 100 per cent equity of a warehouse SPV of RRVL that will give it ownership of logistics infrastructure assets.
As per the filing, the facilities will comprise 64 warehouses spread across 34 cities across the country.
Out of the total sum of Rs 3,048 crore, Rs 2,928 crore will be utilised towards providing a loan to a special purpose vehicle (SPV) for the acquisition of warehousing and logistics assets while the rest will be used to acquire the equity of the SPV
Meanwhile, the shares of Jio Financial Services Ltd, the demerged financial services unit of RIL, continued to have a bad run on the bourses when it again fell 5 per cent to hit the lower circuit limit for the third consecutive trading session both on the BSE and NSE.
The stock dipped to Rs 227.25 on the BSE and Rs 224.65 on the NSE. The company had a market valuation of Rs 1,44,378.38 crore.
