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GIC to buy 1.22% stake in RIL’s Retail Ventures for Rs 5,512.5 crore

GIC will be the fifth investor in Reliance Retail Ventures Ltd (RRVL), a subsidiary of Reliance Industries.

GIC to buy 1.22% stake in RIL’s Retail Ventures for Rs 5,512.5 crore

Prior to this, KKR had previously taken a 1.28 per cent stake in the firm for Rs 5,550 crore. (Photo: AFP)

Singapore’s sovereign wealth fund GIC will pick a 1.22 per cent stake in Reliance Retail Ventures Limited (RRVL) for Rs 5,512.5 crore, Reliance Industries announced on Saturday.

GIC will be the fifth investor in Reliance Retail Ventures Ltd (RRVL), a subsidiary of Reliance Industries.

“GIC will invest Rs 5,512.5 crore into RRVL, a subsidiary of Reliance Industries. This investment values RRVL at a pre-money equity value of Rs 4.285 lakh crore. GIC’s investment will translate into a 1.22 per cent equity stake in RRVL on a fully diluted basis,” the Indian conglomerate said in a statement issued past midnight.

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On Thursday, Reliance Industries had announced that Abu Dhabi-based sovereign wealth fund Mubadala Investment Co will invest Rs 6,247.5 crore to buy a 1.4 per cent stake in its retail arm.

On Wednesday, global private equity firm General Atlantic picked up a 0.84 per cent stake in the company for Rs 3,675 crore. Also, US PE investor Silver Lake made a second investment of Rs 1,875 crore, taking its total fund infusion in Reliance Retail to Rs 9,375 crore for a 2.13 per cent stake.

Prior to this, KKR had previously taken a 1.28 per cent stake in the firm for Rs 5,550 crore.

Speaking about the deal, Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said, “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.”

Any investment received by Ambani’s retail business 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.

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.”

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.

Reliance Retail Limited, a subsidiary of RRVL, operates India’s 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.

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