The Abu Dhabi Investment Authority (ADIA) will invest Rs 5,512.50 crore ($751.35 million at current exchange rates) in Reliance Retail Ventures Ltd, the retail arm of billionaire Mukesh Ambani-led Reliance Industries Ltd.
ADIA will hold a 1.2% stake in Reliance Retail on a fully diluted basis. This values the retail unit at a pre-money valuation of Rs 4.285 trillion, RIL said in a statement.
It comes just three days after RIL said it would raise a total of Rs 7,350 crore (around $1 billion) from Singapore sovereign wealth fund GIC Pte Ltd and US-based private equity firm TPG.
ADIA joins TPG, GIC, Abu Dhabi sovereign fund Mubadala Investment Company and US-based PE firms Silver Lake Partners, KKR and General Atlantic in investing in Reliance Retail.
Overall, Reliance Retail has raised Rs 37,710 crore from these PE and institutional investors in less than four weeks.
“This investment is consistent with our strategy of investing in market leading businesses in Asia linked to the region’s consumption-driven growth and rapid technological advancement,” said Hamad Shahwan Aldhaheri, ADIA’s executive director for its private equities department.
The transaction is subject to regulatory and other approvals. Morgan Stanley acted as the financial adviser to Reliance Retail. Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as the legal counsel to the company.
The spate of investments in Reliance Retail is in addition to the more than $20 billion that RIL mobilised from 13 investors for its digital services unit Jio Platforms Ltd earlier this year. The list included Google, Facebook and all but GIC of the seven investors in Reliance Retail.
RIL, India’s biggest company by market value, has been expanding its retail business as well as its telecom and digital services operations as it diversifies away from its core energy business.
Last month, the conglomerate agreed to acquire Future Group’s retail business in a multi-billion-dollar deal. It also recently bought a majority stake in online pharmacy Netmeds for Rs 620 crore.
Reliance Retail Ventures is the holding company of Reliance Retail Ltd, India’s largest bricks-and-mortar retailer. It reported a consolidated turnover of Rs 162,936 crore and a net profit of Rs 5,448 crore for the year ended March 31, 2020.
In June, RIL said it had become net-debt free through stake sales in Jio Platforms and a rights issue worth $7 billion. At the time, Ambani said strong investor interest in Jio Platforms and RIL’s consumer businesses would help the two units move towards a public listing in the next five years.