Reliance Industries Ltd announced today that global investment firm KKR will invest Rs 5,550 crore in its subsidiary Reliance Retail Ventures Ltd (RRVL). This investment values Reliance Retail at a pre-money equity value of Rs 4.21 lakh crore. KKR's investment will translate into a 1.28 per cent equity stake in RRVL on a fully diluted basis. The investment firm plans to make investment from its Asia private equity funds, an RIL statement said.
Notably, the KKR investment comes days after tech investor Silver Lake announced an investment of Rs 7,500 crore in Reliance Retail for a 1.75 per cent equity stake on a fully diluted basis on September 9. This also marks second investment by KKR in an RIL subsidiary in 2020 -- KKR pumped in Rs 11,367 crore in RIL subsidiary Jio Platforms Ltd earlier this year.
Reliance Retail, a subsidiary of RRVL, operates over 12,000 stores and aims to galvanise India's retail sector by roping in global strategic investors to expand its footprints further across the country. RRVL targets to offload 15-20 per cent stake to private equity players and strategic investors to raise up to Rs 80,000 crore, according to the people aware of the investment talks. The company plans to do it by making deals with around 10 foreign funds for investment at Rs 4.2-lakh crore valuation.
The company, in a statement today, said through its 'New Commerce' strategy, it has also started a "transformational digitalisation" of small and "unorganised merchants" and will expand the network to over 20 million such merchants in India. "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," the company said.
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"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," said Mukesh Ambani, Chairman and Managing Director, Reliance Industries.
Henry Kravis, Co-Founder and Co-CEO of KKR, said Reliance Retail's new commerce platform is filling an important need for both consumers and small businesses. "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," he added.
The global investment firm KKR has over $222 billion in assets under management, as of June 30. It has many invested in leading global companies in consumer retail and e-commerce space, including Epic Games, OutSystems, Internet Brands, Go-jek and Voyager Innovations. The company also has $5.1 billion in private equity investments in over 15 Indian companies, including Jio Platforms, JB Chemicals, Max Healthcare, Eurokids International and Ramky Enviro Engineers.