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Reliance Retail to receive investment worth Rs 1,837 crore from TPG

This is the second investment announced in half an hour by Reliance Retail Ventures around midnight, the earlier one being by GIC of Singapore.

Reliance Retail to receive investment worth Rs 1,837 crore from TPG

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Global alternative asset firm TPG will invest Rs 1,837.5 crore to buy 0.41 per cent stake in Reliance Industries’ retail arm, Retail Ventures Limited (RRVL),the Indian conglomerate announced on Saturday.

“Global investment firm TPG will invest ₹ 1,837.5 crore into RRVL, a subsidiary of Reliance Industries. This investment values Reliance Retail at a pre-money equity value of ₹ 4.285 lakh crore. TPG’s investment will translate into a 0.41% equity stake in RRVL on a fully diluted basis,” the company said in a regulatory filing.

This marks the second investment by TPG in a subsidiary of Reliance Industries, following a Rs 4,546.8 crore investment in Jio Platforms announced earlier this year.
Reliance Retail Limited, a subsidiary of RRVL, operates India’s largest, fastest, the company said.

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This is the second investment announced in half an hour by Reliance Retail Ventures around midnight, the earlier one being by GIC of Singapore.

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 on the latest developments, Chairman and Managing Director of Reliance Industries, Mukesh Ambani 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.”

All the investments 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.

Jim Coulter, Co-CEO, TPG said, “Regulatory changes, consumer demographics and technological disruption are creating seismic shifts across the entire retail value chain in India. 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,” he added.

TPG is making the investment from its TPG Capital Asia fund.

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.

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.

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