US investment firm KKR to invest Rs 5,500 crore for 1.28% stake in Reliance Industries retail unit

The latest investment by KKR, which has a long history of building leading global enterprises, in Reliance Retail underscores its clear belief that the RIL unit is set to lead a disruptive, technology-led transformation of Indian retail sector particularly relevant in the post-pandemic India.

FP Staff September 23, 2020 09:48:46 IST
US investment firm KKR to invest Rs 5,500 crore for 1.28% stake in Reliance Industries retail unit

In an exchange filing, Reliance Industries Ltd (RIL) on Wednesday said that American buyout firm KKR & Co will invest Rs 5,500 crore in Reliance Retail in exchange for a 1.28 percent stake. This is the second deal stitched up by the RIL unit in as many weeks.

The investment values Reliance Retail at a pre-money equity value of Rs 4.21 lakh crore, RIL said.

Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said, “I am pleased to welcome KKR as an investor in Reliance Retail Ventures as we continue our onward march to growing and transforming the Indian Retail ecosystem for the benefit of all Indians.”

Henry Kravis, Co-Founder and Co-CEO of KKR, said, “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 and the company offers tools for Kiranas to be a critical part of the value chain. We are thrilled to support Reliance Retail in its mission to become India’s leading omnichannel retailer and ultimately to build a more inclusive Indian retail economy.”

Private equity giant Silver Lake Partners said on September 9 that it will invest Rs 7,500 crore in Reliance Retail, India’s biggest brick-and-mortar retail business, for a 1.75 percent stake.

RIL, an oil-to-telecom conglomerate, is expanding its retail business through acquisitions and lining up a scrum of global investors to take on rivals such as Amazon India and Walmart-owned Flipkart in India’s huge market. The company said in end August it would buy the retail and logistics businesses of Kishore Biyani’s Future Group in a deal valued at $3.38 billion, including debt.

In May, Reliance launched online grocery service JioMart. These events prove the Mukesh Ambani-controlled company has wind in its back in widening its lead over other competitors.

Reliance Retail is India’s largest retailer

Founded in 2006, Reliance Retail operates India's largest, fastest growing and most profitable retail business. Its footprint spans nearly retail stores in over 7,000 towns with 28.7 million sq ft of retail space and serving close to 640 million footfalls.

The latest investment by KKR, which has a long history of building leading global enterprises, in Reliance Retail underscores its clear belief that the RIL unit is set to lead a disruptive, technology-led transformation of Indian retail sector particularly relevant in the post-pandemic India.

This is also the second investment by KKR in a Reliance enterprise. In May, 2020, KKR said it will invest Rs 11,367 crore in Jio Platforms, the digital services platform of RIL.

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