You are here: Home » Companies » News
Business Standard

Mubadala picks up 1.4% stake in Reliance Retail for Rs 6,247.5 cr

This is the second investment by Mubadala in a subsidiary of Reliance Industries

Topics
Reliance Retail | Reliance Industries

Press Trust of India  |  New Delhi 

Mukesh Ambani, Chairman & MD, RIL

Abu Dhabi-based sovereign wealth fund Mubadala Investment Co will invest Rs 6,247.5 crore to buy a 1.4 per cent stake in Ltd's retail arm: billionaire Mukesh Ambani-led firm's third such deal in less than two days.

Mubadala will be the fourth investor in Ventures Ltd (RRVL). Its Rs 6,247.5-crore investment "values at a pre-money equity value of Rs 4.285 lakh crore," the Indian firm said in a statement. "Mubadala's investment will translate into a 1.40 per cent equity stake in RRVL on a fully diluted basis."

On Wednesday, global private equity firm General Atlantic picked up a 0.84 per cent stake in the company for Rs 3,675 crore. US private equity investor Silver Lake made a second investment of Rs 1,875 crore, taking its total fund infusion in to Rs 9,375 crore for a 2.13 per cent stake.

KKR took a 1.28 per cent stake in the firm for Rs 5,550 crore. Reliance has since September raised Rs 24,847.5 crore by selling 5.65 per cent in its retail arm.

ALSO READ: Hurun India Rich list 2020: Mukesh Ambani tops for 9th consecutive year

Reliance Retail Ltd, a subsidiary of RRVL, operates India's largest retail business spanning supermarkets, consumer electronics chain stores, cash and carry wholesale business, fast-fashion outlets and online grocery store JioMart.

It operates about 12,000 stores in nearly 7,000 towns, with 640 million footfalls across core categories of grocery, consumer electronics and apparel. Revenues for Reliance Retail in FY20 stood at Rs 1.63 lakh crore.

The transaction is subject to regulatory and other customary approvals. Morgan Stanley acted as financial advisor to Reliance Retail and Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as legal counsels.

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.

This is the second investment by Mubadala in a subsidiary of It had previously invested Rs 9,093.60 crore for a 1.85 per cent stake in Jio Platforms.

Mukesh Ambani, chairman and managing director of Reliance Industries, said: "We value the partnership with a knowledge-rich organization like Mubadala and acknowledge their confidence in our mission to strengthen the core of India's retail sector - the millions of small retailers, merchants and shopkeepers - through the power of technology."

Khaldoon Al Mubarak, managing director and group CEO, Mubadala Investment Company, said: "We are pleased to deepen our relationship with through this investment in Reliance Retail Ventures. Their vision is the inclusive transformation of India''s consumer economy through the power of digitization, creating opportunities and market access for millions of small businesses across the country, and we are committed to supporting the company''s continuing development."

Headquartered in Abu Dhabi, Mubadala has a portfolio of $232 billion spanning over six continents with interests in multiple sectors and asset classes.


ALSO READ: Mukesh Ambani's next weapon to dominate telecom market is a Rs 4,000 phone

Following the sell-down in its digital unit Jio Platforms, Reliance's focus has shifted to retail with the acquisition of Future Group’s businesses and investment by global private equity firms/strategic investors.

All 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, KKR, General Atlantic and Mubadala, the other investors in Jio Platforms -- which houses India''s youngest but largest telecom operator Jio -- include Facebook and Google.

Reliance Retail has consolidated its dominant market position in offline retail through its recent acquisition of retail, wholesale, logistics and warehouse businesses of Future Group for an enterprise value of Rs 24,173 crore.

The firm in May this year launched JioMart, its e-commerce platform. Reliance aims to digitise kirana stores through its new commerce business. In July, JioMart was serving 400,000 orders a day and is currently operational in 200 cities.

With this, Jio Platforms and Reliance Retail account for over Rs 9 lakh crore of RIL''s valuation of around Rs 15 lakh crore.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, October 01 2020. 19:34 IST
RECOMMENDED FOR YOU
.