- GIC to invest ₹ 5,512.5 crore in Reliance Retail Ventures
- TPG to invest ₹ 1,837.5 crore in Reliance Retail Ventures
This article was originally published on Mint.
Reliance Industries today announced that global investment firm GIC will invest ₹ 5,512.5 crore into its retail arm Reliance Retail Ventures Limited (RRVL) and also and also another investment firm TPG will invest ₹ ₹ 1,837.5.
Reliance Industries said in a regulatory filing that both GIC and TPG investment will translate 1.22% equity stake and a 0.41% equity stake in RRVL respectively on a fully diluted basis.
With these, Reliance Industries has sold 7.28% stake in the retail unit since September 9 for a total of ₹32,297.50 crore.
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.
Reliance Industries Limited (Reliance Industries) and Reliance Retail Ventures Limited (RRVL) announced today that GIC will invest ₹ 5,512.5 crore into
RRVL, a subsidiary of Reliance Industries. This investment values RRVL at a pre-money equity value of ₹ 4.285 lakh crore. GIC’s investment will translate into a 1.22% equity stakein RRVL on a fully diluted basis.
Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said, “It gives me great pleasure to welcome GIC to the Reliance Retail family. I am delighted that GIC, with its track record of close to four decades of successful long-term value investing across the world, is partnering with Reliance Retail in its mission to transform the Indian retail landscape. GIC’s global network and track record of long-term partnerships will be invaluable to the transformation story of Indian Retail. This investment is a strong endorsement of our strategy and India’s potential.
Lim Chow Kiat, Chief Executive Officer, GIC, said: “GIC is pleased to partner with Reliance through this new investment, which will enable the company to position Reliance Retail for the strong secular growth in India’s retail market. We believe Reliance Retail will continue to use its extensive supply chain and store networks, as well as strong logistics and data infrastructure, to add value to its customers and shareholders.”
Reliance Industries Limited and RelianceRetail Ventures Limited (RRVL) announced today that global investment firm TPG will invest ₹ 1,837.5 crore into RRVL, a subsidiary of Reliance Industries. This investment values
It will be the second investment by TPG in a subsidiary of Reliance Industries, following a ₹ 4,546.8 crore investment in Jio Platforms announced earlier this year.
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. Reliance Retail’s vision is to galvanize the Indian retail sector through an inclusive strategy serving millions of customers by empowering millions of farmers and micro, small and medium enterprises (MSMEs) and working closely with global and domestic companies as a preferred partner, to deliver immense benefits to Indian society, while protecting and generating employment for millions of Indians. Reliance Retail, through its New Commerce strategy, has started a transformational digitalization of small andunorganised merchants and is committed to expanding the network to over 20 million of these merchants. This will enable the merchants to use technology tools and an efficient supply chain infrastructure to deliver a superior value proposition to their own customers.
TPG is a leading global alternative asset firm founded in 1992 with more than $83 billion of assets under management across a wide range of asset classes, including private equity, growth equity, real estate and public equity. Over TPG’s nearly 30-year history, the firm has built an ecosystem made up of hundreds of portfolio companies and a value-added network of professionals, executives, and advisors around the world. By offering institutional support and global resources, TPG enables these companies to reach their full potential and unlock greater possibilities.
TPG is making the investment from its TPG Capital Asia fund.
Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said, “I am pleased to welcome TPG as valued investors in Reliance Retail Ventures mission of growing and transforming the Indian Retail ecosystem for the benefit of all Indians. TPG has a proven track record of being a valuable partner to global technology businesses and industry leaders and we look forward to their guidance and support in our journey.”
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. Deloitte Touche Tohmatsu India LLP acted as financial advisor to TPG and Shardul Amarchand Mangaldas & Co. acted as legal counsel to TPG.
Jim Coulter, Co-CEO, TPG, said, “Regulatory changes, consumer demographics and technological disruption are creating seismic shifts across the entire retail value chain inIndia. In the midst of this transformation, Reliance Industries has utilized technology and scale to position Reliance Retail as an incredibly strong, well-organized, and innovative leader. We are excited to join with them as they seek to create a more inclusive retail industry that allows Kiranas and Indian consumers to benefit from the connectivity, efficiency, and accessibility of the Reliance Retail omnichannel platform.”
Isha Ambani, Director of Reliance Retail, said, “We are delighted to welcome TPG to the Reliance Retail family in our journey of revolutionizing the Indian Retail landscape and improving the economic prospects of millions of merchants and enhancing consumer experience. TPG’s rich experience will be invaluable to the Reliance Retail mission.”
Puneet Bhatia, Co-Managing Partner and Country Head, India of TPG Capital Asia, said, “There is a significant opportunity to transform the Indian retail ecosystem for the better. Through their New Commerce initiative, Reliance Retail continues to lead the industry by creating a retail platform that meets the demands of a new generation of Indian consumers. We are excited to work with Reliance Industries as they reimagine the retail experience across the value chain.”
US private equity firm Silver Lake has made two investments totalling ₹9,375 crore for a 2.13% stake in Reliance Retail, while General Atlantic has picked up 0.84% stake for ₹3,675 crore, and KKR put in ₹5,550 crore for a 1.28% stake.
Abu Dhabi-based sovereign wealth fund Mubadala Investment Co invested ₹6,247.5 crore for a 1.4 per cent stake.
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