US private equity firm KKR & Co. will invest Rs 5,550 crore in Reliance Industries Limited’s (RIL) retail arm for a 1.28 per cent stake. This is the second deal by Reliance Retail in as many weeks. The investment values Reliance Retail at a pre-money equity value of Rs 4.21 lakh crore, RIL said in an exchange filing on September 22.
Earlier this month, private equity giant Silver Lake Partners had said that it will invest Rs 7,500 crore in Reliance Retail, India’s biggest brick-and-mortar retail business, for a 1.75 per cent stake.
RIL, an oil-to-telecom conglomerate, is expanding its retail business and lining up a posse of global investors to take on rivals such as Amazon India and Walmart-owned Flipkart in India’s huge market.
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.”
Reliance’s retail footprint spans across 11,806 stores in over 7,000 towns with 28.7 million sq ft of retail space. Reliance Retail, founded in 2006, said in end August that it would buy the retail and logistics businesses of Kishore Biyani’s Future Group in a deal valued at $3.38 billion (Rs 24,713 crore), including debt.
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.
Founded in 1976, KKR has been successfully investing in businesses in the technology sector, including BMC Software, ByteDance and GoJek through its private equity and technology growth funds. Since inception, the firm has invested over $30 billion (total enterprise value) in tech companies, and today the firm’s technology portfolio has more than 20 companies across the Technology, Media and Telecom sectors. In addition, India has been a key strategic market for KKR with a history of investing in the country since 2006.
Reliance Retail Limited, a subsidiary of RRVL, operates India’s largest, fastest growing and most profitable retail business serving close to 640 million footfalls across its ~12,000 stores nationwide.
Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd
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