KKR to invest Rs 5,550 crore in Reliance Retail Ventures for 1.28% equity

Global investment firm KKR will invest Rs 5,500 crore in Reliance Retail for 1.28 per cent equity share, Reliance Industries Limited said in a BSE filing on Wednesday. This marks the second investment by KKR in a Reliance subsidiary, following a Rs 11,367 crore investment in Jio Platforms announced earlier this year. 

KKR's investment values Reliance Retail at a pre-money equity value of Rs 4.21 trillion.

“I am pleased to welcome KKR as an investor in Reliance Retail Ventures as we continue our onward march. KKR has a proven track record of being a valuable partner to industry-leading franchises and has been committed to India for many years," said Mukesh Ambani in a statement issued by RRVL. 

Reliance Retail runs supermarkets, India's largest consumer electronics chain store, a cash and carry wholesaler, fast-fashion outlets and an online grocery store JioMart. The acquisition of Future Group's retail business added about 1,700 large stores to RIL's 11,806 stores in its retail segment and increased its organised retail revenue market share by around 5 per cent.

Weeks after Ambani, raised about $20 billion selling stakes in his technology venture to investors including Facebook Inc. and Google, the tycoon is repeating the same with his retail business. Earlier, Silver Lake had invested Rs 7,500 cr into Reliance Retail Ventures, valuing the business at about Rs 4.2 trillion. Silver Lake also put $1.35 billion for a stake in Ambani’s Jio Platforms Ltd, while KKR invested $1.5 billion.

Henry Kravis, Co-Founder and Co-CEO of KKR said, “We are pleased to deepen our relationship with Reliance Industries through this investment in Reliance Retail Ventures. 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." 

KKR is making its investment from its Asia private equity funds. Founded in 1976, KKR has USD 222 billion in assets under management as of June 30, 2020. It currently has about USD 5.1 billion in private equity investments across more than 15 Indian companies, including Jio Platforms, JB Chemicals, Max Healthcare, Eurokids International and Ramky Enviro Engineers.

The investment will add fire to Ambani's battle for dominance in the retail market that is also being eyed by Jeff Bezos' Amazon.com and Walmart Inc's Flipkart.

After monetising Jio Platforms -- which houses the firm's telecom arm and digital ventures, richest Indian Mukesh Ambani is roping in investors in the retail business.

All the 13 investors, who had poured in a combined Rs 1.52 lakh crore in Jio Platforms, have been offered a chance to explore investing in the retail unit.

Besides Silver Lake and KKR, the other investors in Jio Platforms include Facebook, Google, private equity groups Vista and General Atlantic and Abu Dhabi's sovereign wealth fund Mubadala. With this, Jio Platforms and Reliance Retail account for over Rs 9 lakh crore of RIL valuation.