PE firm KKR picks up 1.28% stake in Reliance Retail for Rs 5,550 crore

Second PE deal in two weeks; valuation same at Rs 4.2 trillion

Reliance Industries (RIL) on Wednesday said private equity (PE) firm KKR would invest Rs 5,550 crore in its subsidiary Reliance Retail for a 1.28 per cent stake, making it the second deal to be announced in a fortnight by the Mukesh Ambani-led company. Earlier, US-based PE firm Silver Lake had announced that it would invest Rs 7,500 crore in the retail firm for a 1.75 per cent stake.

Reliance Retail has so far raised Rs 13,050 crore in two rounds at the same vauation -- Rs 4.2 trillion. Sector analysts said they expected more, at least Rs 4.5 trillion in terms of valuation, given that Reliance Retail had big plans for the future, including an omni-channel play and greater association with farmers, manufacturers, and kirana store owners.

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

In a statement, Ambani, chairman and managing director of RIL, said KKR was a “valuable partner” and that the latter remained committed to the Indian market. 

RIL shares closed at Rs 2,229.55 apiece on the BSE, up 0.83 per cent over the previous day's close.

For KKR, this will be the second investment in an RIL subsidiary, after the PE's firm Rs 11,367-crore fund infusion into Jio Platforms earlier this year.

Reliance Retail had given the option to investors in Jio Platforms to consider backing the former as it sought to unlock value.

Investors such as Abu Dhabi Investment Authority and Mubadala could be next in line, though a Reliance spokesperson said it could 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 Sebi and our agreements with the stock exchanges," the spokesperson said.

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

Reliance offloaded nearly 33 per cent 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 Reliance Retail and that they would be inducted into the company in the forthcoming quarters.