Reliance Industries Limited (RIL) and Reliance Retail Ventures Limited (RRVL) on Wednesday announced that global investment firm KKR will invest Rs5,550 crore into RRVL, a subsidiary of Reliance Industries. This investment values Reliance Retail at a pre-money equity value of Rs4.21 lakh crore.
KKR’s investment will translate into a 1.28 per cent equity stake in RRVL on a fully diluted basis.
This marks the second investment by KKR in a subsidiary of Reliance Industries, following a Rs11,367-crore investment in Jio Platforms announced earlier this year.
Reliance Retail Limited, a subsidiary of RRVL, operates India's largest, fastest growing and most profitable retail business, which claims close to 640 million footfalls across its 12,000-odd stores nationwide.
Reliance Retail aims at galvanising the Indian retail sector through an inclusive strategy empowering millions of farmers and 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.
Reliance Retail, through its New Commerce strategy, has started a transformational digitization of small and unorganized merchants and is committed to expanding the network to over 20 million of these merchants. This will enable the merchants to use technology tools and an efficient supply chain infrastructure to deliver a superior value proposition to their own customers.
KKR has $222 billion in assets under management as of 30 June 2020 and a
long history of building leading global enterprises, including many companies at the forefront of technology and digital transformation, including in areas of consumer retail and ecommerce, such as investments in Epic Games, Out Systems, Internet Brands, Go-jerk and Voyager Innovations.
“I am pleased to welcome KKR as an investor in Reliance Retail Ventures as we continue our onward march to growing and transforming the Indian Retail ecosystem for the benefit of all Indians. KKR has a proven track record of being a valuable partner to industry-leading franchises and has been committed to India for many years. We look forward to working with KKR’s global platform, industry knowledge and operational expertise across our digital services and retail businesses,” Makes Amana, chairman and managing director of Reliance Industries, said.
“We are pleased to deepen our relationship with Reliance Industries through this investment in Reliance Retail Ventures, which is empowering merchants of all sizes and fundamentally changing the retail experience for Indian consumers. Reliance Retail’s new commerce platform is filling an important need for both consumers and small businesses as more Indian consumers move to shopping online and the company offers tools for Karana’s to be a critical part of the value chain. We are thrilled to support Reliance Retail in its mission to become India’s leading omnichannel retailer and ultimately to build a more inclusive Indian retail economy,” Henry Kravis, co-founder and Co-CEO of KKR, said.
KKR is making its investment from its Asia private equity funds. The transaction is subject to regulatory and other customary approvals.
RIL, with a consolidated turnover of Rs6,59,205 crore ($87.1 billion), cash profit of Rs71,446 crore ($9.4 billion), and net profit of Rs39,880 crore ($5.3 billion) for the year ended 31 March 2020.