Abu Dhabi Investment Authority invests Rs 5,512.50 cr in Reliance Retail

With eight deals in four weeks, analysts were expecting the valuation of the firm to touch at least Rs 4.5 trillion

Reliance Industries (RIL) on Tuesday said that the Abu Dhabi Investment Authority (ADIA) would invest Rs 5,512.50 crore into subsidiary Reliance Retail Ventures (RRVL) for 1.2-per cent stake.

This is the eighth deal to be announced by the Mukesh Ambani-led firm in four weeks, stepping up its stake-sale process that has seen marquee investors back the firm so far. The valuation of the company, however, remains at Rs 4.2 trillion — a worrying sign, say sector experts.

Analysts were expecting the valuation of the firm to touch at least Rs 4.5 trillion, as the stake-sale process proceeded. It hasn’t happened so far.

On Tuesday, RIL closed trade at Rs 2,210.15 per share on the BSE — down 0.05 per cent over the previous day’s close.

 

So far, RRVL has raised Rs 37,710 crore, offloading 8.48 per cent stake to investors. Analysts say that Reliance will complete small deals with financial investors, although induction of a strategic investor into the company cannot be ruled out to strengthen its back-end and supply-chain management.

Last week, the company announced four transactions — one by General Atlantic for Rs 3,675 crore, which would pick up 0.84-per cent stake in the firm.

The second was by the co-investors of private equity giant Silver Lake, which would invest an additional Rs 1,875 crore into RRVL. This would take the combined investment by Silver Lake and its co-investors in RRVL to Rs 9,375 crore in exchange for 2.13-per cent stake.

On Saturday, GIC and TPG said they would put Rs 5,512.50 crore and Rs 1,837.50 crore, respectively, into the company for 1.22-per cent and 0.41-per cent stake, respectively, in the firm.

The week earlier, KKR had put Rs 5,550 crore for 1.28-per cent in the firm.

Speculation is rife that tech investors may come on board, although a Reliance spokesperson said the company would not comment on market speculation.

“As a policy, we do not comment on media speculation and rumours. Our company evaluates various opportunities on an ongoing basis. We have made and will continue to make necessary disclosures in compliance with our obligations under the Securities and Exchange Board of India and our agreements with the stock exchanges,” the spokesperson said.

RRVL though has given the option to investors in Jio Platforms to consider backing the former as it seeks to unlock value. So far, the investors in RRVL are those that have invested in Jio Platforms earlier.

RRVL remains the largest organised retail player in the country, with the company recently announcing the acquisition of the retail, wholesale, and logistics assets of Future Group in a Rs 25,000-crore transaction.

 

In a statement, Ambani, who is chairman and managing director of RIL, said that ADIA was a “valued investor”, committed to the Indian market.

Along with Jio, retail contributes 35 per cent to RIL’s consolidated earnings before interest, tax, depreciation, and amortisation, Ambani had said at the firm’s annual general meeting (AGM) in July.

Reliance had offloaded nearly 33 per cent stake in Jio Platforms to 14 investors for Rs 1.52 trillion between April and June, emerging as the only firm in the country to go in for a massive monetisation exercise at the height of the lockdown.

Ambani had indicated at the AGM that “global partners and investors” were also keen to invest in RRVL and that they would be inducted into the company in the forthcoming quarters.

RETAIL THERAPY

• Investment spree at Reliance Retail Ventures (RRVL) is on
• Firms backing Jio Platforms coming on board the retail company
• KKR, Silver Lake and its partners, General Atlantic, Mubadala Investment Company, GIC, TPG, ADIA, have put in nearly Rs 37,710 crore into RRVL
• Stake offloaded so far is 8.48%