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

This is the second major investment in Reliance Retail in the past month. Earlier, American private equity player Silver Lake invested Rs 7,500 cr into Reliance Retail Ventures to buy a 1.75% Stake. 

Sep 23, 2020 17:44 IST
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Global investment firm KKR will be investing Rs 5,550 crore into Reliance Retail ventures Limited (RRVL) for a 1.28% equity stake on a fully diluted basis. The announcement was made by Reliance Industries Limited on September 23, 2020. 

This is the second major investment in Reliance Retail in the past month. Earlier, American private equity player Silver Lake invested Rs 7,500 cr into Reliance Retail Ventures to buy a 1.75% Stake. 

This is also KKR’s second investment in a subsidiary of Reliance Industries, as earlier this year, the firm had invested Rs 11,367 crore in Jio Platforms for a 2.32 percent stake.

Significance

KKR’s investment values Reliance Retail at a pre-money equity value of Rs 4.21 lakh crore. The investment will further boost RIL’s efforts to dominate the retail market and give it an edge over its competitors Amazon and Walmart Inc's Flipkart.

RIL Chairman’s statement:

RIL Chairman Mukesh Ambani said that KKR has a proven track record of being a valuable partner to industry-leading franchises and has been committed to India for many years. He stated that they are looking forward to working with KKR’s global platform, industry knowledge and operational expertise across our digital services and retail businesses. 

KKR’s Co-Founder/ Co-CEO statement: 

KKR’s Co-CEO Henry Kravis stated that they are pleased to deepen their relationship with Reliance Industries through this investment in Reliance Retail Ventures. Kravis noted that Reliance Retail’s new commerce platform is filling an important need for both consumers and small businesses as more Indian consumers move to shop online.

Background

Reliance Retail operates India’s largest, fastest-growing and most profitable retail business. It runs supermarkets, consumer electronics chain store, cash and carry wholesaler, fast-fashion outlets and online grocery store JioMart. 

Reliance Retail’s acquisition of Future Group's retail business added about 1,700 large stores to RIL's already existing 11,806 stores in its retail segment and increased its organised retail revenue market share by around 5 percent.

All 13 investors, who had poured in investments in RIL’s Jio platform were offered a chance to explore investing in its retail businesses. Besides Silver Lake and KKR, the other investors in Jio Platforms include Facebook, Google, Vista Equity Partners, General Atlantic and Abu Dhabi's sovereign wealth fund Mubadala. 

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