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KKR to invest Rs 5,550 cr in Reliance Retail

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Mukesh Ambani-owned Reliance Industries Limited (RIL) on Wednesday informed that global investment firm KKR is all set to invest Rs 5,550 crore in Reliance Retail Ventures Limited (RRVL). Notably, RRVL is a subsidiary of Reliance Industries.

According to Reliance, KKR’s fresh investment values Reliance Retail at a pre-money equity value of Rs 4.21 lakh crore. Through the investment, KKR will buy a 1.28 per cent equity stake in Reliance Retail. The investment firm has already invested Rs 11,367 crore in Reliance’s digital arm—Jio Platforms— earlier this year.

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 KKR. Shardul Amarchand Mangaldas & Co. and Simpson Thacher & Bartlett LLP acted as legal counsel to KKR.

Reliance aims to strengthen its retail presence

The KKR deal comes at a crucial time for the oil-to-telecom conglomerate as it is aggressively trying to strengthen its retail business in India. Reliance Retail is competing with e-commerce giants such as Amazon and Flipkart in the segment and is on the lookout for potential investors.

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In August, Reliance Industries purchased the retail, wholesale, logistics and warehousing businesses of Future Group for Rs 24,713 crore.

What did Mukesh Ambani say?

Reliance Industries Limited’s chairman and managing director Mukesh Ambani said: “I am pleased to welcome KKR as an investor in Reliance Retail Ventures as we continue our onward march to growing and transforming the Indian Retail ecosystem for the benefit of all Indians.”

“KKR has a proven track record of being a valuable partner to industry-leading franchises and has been committed to India for many years,” he added.

Not a standalone investment

The investment by KKR is not a standalone investment. In fact, it is the second investment by a company in Reliance Retail. Earlier, US-based private equity firm Silver Lake had invested Rs 7,500 crore in the conglomerate’s retain arm. The investment translated into an equity stake of 1.75 per cent.

 

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