Reliance Retail gets full subscription amount of Rs 2,069.50 cr from KKR
Reliance Retail Ventures Limited (RRVL), a subsidiary of Reliance Industries Limited (RIL), has successfully received a substantial investment of Rs 2,069.50 crore from Alyssum Asia Holdings II Pte. Ltd., an entity affiliated with the global investment firm KKR. This financial transaction was disclosed in a regulatory filing made by RIL on September 22.
As part of this investment agreement, Alyssum Asia Holdings II Pte. Ltd. (KKR) has been allotted 1,71,58,752 equity shares in RRVL. This equity infusion marks a significant development in the financial landscape of RRVL and strengthens its capital base, which can be crucial for the company’s expansion and growth initiatives.
The valuation resulting from this investment is noteworthy. RRVL is now valued at a pre-money equity value of Rs 8.361 lakh crore. This valuation places RRVL among the top four companies in India in terms of equity value. Such a high valuation reflects the confidence that investors like KKR have in the potential and prospects of Reliance Retail Ventures Limited and its role in the Indian retail sector.
Investments of this magnitude are indicative of the attractiveness of the Indian retail market and Reliance Industries’ ability to attract global investors. This infusion of capital can enable RRVL to further its expansion plans, develop new business strategies, and potentially explore new opportunities in the retail sector.
In summary, the investment by KKR’s Alyssum Asia Holdings II Pte. Ltd. in RRVL not only strengthens RRVL’s financial position but also underscores the growing significance of the Indian retail sector on the global stage. It positions RRVL as a key player with substantial market value in the Indian corporate landscape.
KKR’s latest investment in RRVL represents a follow-on investment, and it will result in KKR acquiring an additional equity stake of 0.25% in RRVL on a fully-diluted basis. This means that after this latest investment, KKR will hold a total equity stake of 1.42% in RRVL, taking into account its previous investment in 2020.
To provide context, KKR had invested Rs 5,550 crore in RRVL in the year 2020. At that time, this investment was made at a pre-money equity valuation of Rs 4.21 lakh crore. Pre-money equity valuation refers to the estimated total value of a company’s equity before the investment is made.
Now, with KKR’s follow-on investment of Rs 2,069.50 crore in 2023, RRVL’s valuation has significantly increased, reaching a pre-money equity value of Rs 8.361 lakh crore. This substantial increase in valuation reflects the impressive growth and performance of RRVL in the intervening years.
In summary, KKR’s follow-on investment in RRVL not only increases its equity stake in the company but also demonstrates its continued confidence in RRVL’s growth potential and the Indian retail market as a whole. RRVL’s valuation has risen significantly since KKR’s initial investment in 2020, highlighting the company’s strong position in the retail sector and its ability to attract substantial investments from global investors like KKR.
Reliance Industries’ retail subsidiary, Reliance Retail Ventures Limited (RRVL), is a retail giant in India, operating the country’s largest and most lucrative retail business. Through its subsidiaries and associated companies, RRVL caters to an extensive customer base of 26.7 crore individuals through a vast network of over 18,500 stores and digital commerce platforms.
RRVL’s diverse offerings encompass grocery, consumer electronics, fashion & lifestyle, and pharmaceuticals, meeting the diverse needs of Indian consumers. Furthermore, it’s noteworthy that KKR, in addition to its investment in RRVL, has also invested in Jio Platforms Limited, which serves as the telecommunications arm of Reliance Industries Limited (RIL), further emphasizing the strategic collaboration between KKR and RIL across different business sectors.
