Abu Dhabi Investment Authority invests Rs 4,967 crore in Reliance retail

Abu Dhabi Investment Authority (ADIA) will invest ₹4,966.8 crore through a wholly owned subsidiary to pick up a 0.59% stake in Reliance Retail Ventures Ltd (RRVL), the latter said on Friday.

This round of fundraising has valued the holding company for Reliance Industries' retail businesses at ₹8.38 lakh crore. With this, the Mukesh Ambani-owned company has raised over ₹15,300 crore in three rounds this fiscal. The previous round in September had valued RRVL at ₹ 8.36 lakh crore while the earlier round in August valued it at ₹8.28 lakh crore.

A press release issued by RRVL said this valuation has made the company among the top four by equity value in the country.

ADIA already owns around 1.18% in RRVL.

ET was the first to report about the latest transaction in the September 27 edition.

At present, around 11.9% in RRVL is owned by global investors, over 87% by RIL, and the rest by small investors. ET has also reported that RIL is going to sell more stake in RRVL to fund expansion, retire debt, and prepare for the unit's initial public offering (IPO). The stake sale is crucial because at the current valuation, RRVL's IPO size will be too large for the current liquidity to absorb. RRVL, through its units and associates, runs India's largest, fastest growing, and most profitable retail business, serving 267 million customers with an integrated omnichannel network of over 18,500 stores and digital commerce platforms across grocery, electronics, fashion and lifestyle, and pharma consumption baskets.

Isha Ambani, executive director of RRVL, said in the release that ADIA's long-standing experience of over decades of value creation globally will benefit the firm in implementing its vision and driving transformation of the Indian retail sector.

'In Alignment with Strategy'
"ADIA's investment in RRVL is a further testament to their belief in the Indian economy and our business fundamentals, strategy and execution capabilities," Isha Ambani said.

Hamad Shahwan Aldhaheri, executive director of the private equities department at ADIA, said Reliance Retail has demonstrated strong growth and adaptability in a market that is evolving at an unprecedented pace.

"This investment aligns with our strategy of supporting our portfolio companies that are transforming their respective end-markets. We are pleased to partner with Reliance Group and increase our exposure to India's dynamic and fast-growing consumer sector," he said.

Morgan Stanley acted as financial advisor to RRVL while Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as legal counsels.