Reliance Retail scores $750 mn from Abu Dhabi sovereign fund

Mukesh Ambani-led Reliance Retail (RRVL) has raised Rs 5,512.50 crore ($750 million) from a subsidiary of Abu Dhabi Investment Authority (ADIA). 

The investment, which values RRVL at a pre-money equity value of $58.5 billion, will give the sovereign wealth fund, owned by the Emirate of Abu Dhabi, a 1.2% stake in the Indian retail giant.

With this investment, RRVL has raised $5.16 billion (Rs 37,710 crore) from global investors, including Silver Lake, KKR, General Atlantic, Mubadala, GIC, TPG and ADIA in the past four weeks, the company said in a statement.

“Reliance Retail has rapidly established itself as one of the leading retail businesses in India and, by leveraging both its physical and digital supply chains, is strongly positioned for further growth. This investment is consistent with our strategy of investing in market leading businesses in Asia linked to the region’s consumption-driven growth and rapid technological advancement,” Hamad Shahwan Aldhaheri, executive director of the private equities department at ADIA, said.

On Monday, the company raised $753.6 million (about Rs 5512.5 crore) from GIC, the sovereign wealth fund of Singapore government, and San Francisco, California-based private equity firm, TPG. 

A week before that, Abu Dhabi-based sovereign firm Mubadala Investment Company said it would invest $852.5 million, while returning investor Silver Lake put in an additional $256 million in the company.

“We are delighted with ADIA’s current investment and continued support and hope to benefit from its strong track record of over four decades of value creation globally. The investment by ADIA is a further endorsement of Reliance Retail’s performance and potential and the inclusive and transformational New Commerce business model that it is rolling out,” Mukesh Ambani, chairman and managing director of Reliance Industries, said.

RRVL houses RIL’s retail companies as well as its omni-channel business, Jio Mart, as part of its ‘new commerce’ strategy. It digitises small unorganised merchants to use technology tools for supply chain infrastructure as part of the business. In August, the company acquired Kishore Biyani-led Future Group for $3.38 billion to strengthen its retail presence. It currently operates nearly 12,000 retail stores. 

RRVL recorded a consolidated turnover of $21.7 billion and a net profit of $726.4 million for the financial year ended March 31, 2020. 

In June, ADIA said it would invest $750 million in Jio Platforms, the telecom subsidiary of Reliance Industries.

Jio Platforms, which houses Reliance’s telecom and digital services businesses, has so far raised nearly $21 billion (Rs 1,52,056 crore) from a clutch of strategic and financial investors, including Facebook, Google, Vista Equity Partners, General Atlantic, KKR, Abu Dhabi Investment Authority, L Catterton, TPG Capital, Intel Capital and Qualcomm.