In a major development, Reliance Retail Ventures Limited (RRVL), a subdivision of India’s conglomerate Reliance Industries, has secured an important investment from global investment firm KKR. This strategic move, made it public on September 11, 2023, positions RRVL as a formidable player in the Indian retail sector, with a pre-money equity valuation of ₹8.361 lakh crore.
KKR’s funding of ₹2,069.50 crore in RRVL marks a strategic move to build up its foothold in the Indian retail market. This following investment will render an added equity stake of 0.25% in RRVL on a fully adulterated basis. When merged with KKR’s former investment of ₹5,550 crore in RRVL in 2020, the global investment firm’s entire equity stake in RRVL will rise to 1.42% on a fully adulterated basis. Notably, in 2020, RRVL successfully lifted ₹47,265 crore from various global investors, valuing the company at ₹4.21 lakh crore.
The funding by KKR is firstly sourced from its Asian Fund IV and is subject to administrative and conventional approvals. This transaction underscores KKR’s steady conviction in RRVL and its commitment to catalyzing an alteration in the Indian retail landscape.
Reliance Retail’s Impressive Portfolio
Reliance Industries’ retail arm, RRVL, is renowned for managing India’s biggest and most successful retail business. The company serves an astonishing 26.7 crore customers through a vast web of over 18,500 stores and digital business platforms. RRVL’s various portfolio spans grocery, customer electronics, fashion and lifestyle, and pharma consumption baskets. What sets RRVL apart is its remarkable ability to adapt and thrive in a rapidly evolving retail landscape, particularly in the face of challenges posed by the pandemic and other upheavals.
Isha Mukesh Ambani, Director of Reliance Retail Ventures Limited, disclosed her excitement about the ongoing collaboration with KKR. She brought up the invaluable contributions of KKR’s global platform, industry expertise, and working mastery in their shared commission to revolutionize the Indian retail sector.
Joe Bae, Co-CEO of KKR, lauded RRVL’s vision and its commitment to certifying retailers across India through digitalization. He complimented RRVL’s durability and impressive execution in overcoming provocation, further solidifying KKR’s trust in the company’s capability.
Gaurav Trehan, Head of Asia Pacific Private Equity and Head of India at KKR, accepted Reliance Retail’s leadership and innovation within India’s retail sector. He emphasized that RRVL’s unique business model has the transformative power to digitize and modernize India’s retail industry, paving the way for a more comprehensive and contemporary retail economy.
Morgan Stanley worked as the financial advisor to Reliance Retail Ventures Limited for this monumental investment. Cyril Amarchand Mangaldas and Davis Polk & Wardwell gave crucial legal counsel. These partnerships underscore the dedication to executing this deal efficiently and in strict compliance with all relevant regulations.
Expanding Collaboration Beyond Retail
Beyond its funding in RRVL, KKR is also a prominent investor in Jio Platforms Limited, the telecom platform of Reliance Industries Limited. This demonstrates KKR’s broader interest in collaborating with Reliance Industries across multiple sectors, reaffirming their collaborative approach towards transforming various industries in India.
KKR’s significant funds in Reliance Retail Ventures Limited herald the latest era in India’s retail sector. With an ever-expanding customer base and a diversified portfolio, RRVL is poised to pursue its remarkable journey of transforming India’s retail landscape. KKR’s confidence in RRVL’s potential underscores the pivotal role it plays in the Indian retail market. This strategic partnership holds immense promise for both companies and further emphasizes the dynamism and innovation within India’s evolving retail ecosystem.