KKR puts ₹5,550 cr in RIL retail arm; are TPG, ADIA coming in?

Rajesh Kurup Mumbai | Updated on September 23, 2020

This investment values Reliance Retail at a pre-money equity value of ₹4.21 lakh crore

The procession of private equity funds lining up to invest in the Reliance group continues. On Wednesday, the company announced a ₹5,550-crore fund-raise from US-based investment firm KKR for a 1.28 per cent stake in Reliance Retail Ventures Ltd (RRVL).

This marks the second PE investment in RRVL after the September 8 mop-up of ₹7,500 crore from US-based Silver Lake. More deals are expected over the next few weeks, with the names of global investors TPG and Abu Dhabi Investment Authority (ADIA) doing the rounds.

The KKR deal values RRVL at ₹4.21-lakh crore.


“I am pleased to welcome KKR as an investor in RRVL 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,” said Reliance Industries CMD Mukesh Ambani in a BSE release.

Repeat investor

KKR’s investment, which it is making from its Asia PE funds, marks its second funding of an RIL subsidiary. It had invested ₹11,367 crore in Jio Platforms earlier this year.

RRVL operates India's largest retail business with about 640 million footfalls across 12,000 stores. Founded in 1976, KKR has $222 billion in assets under management as of June 30, 2020.

Analysts at research and brokerage firm Bernstein said RIL is now training its focus on retail, as evidenced by its acquisition of Future Retail, launch of JioMart (e-commerce) and a fund-raising spree.

“We expect a break-up of the company in the next 3-4 years through an IPO of the Jio and retail business segments, which should unlock additional shareholder value,” it said.

The Indian retail market was $700 billion in 2018, and is expected to grow at a 10 per cent CAGR to hit $1.3 trillion by 2025. Organised retail is expected to grow faster (18 per cent CAGR) and reach a 15 per cent share of the total market by 2025 compared to 8 per cent in 2018.


Also read: Reliance Retail taps Facebook for stake sale




Published on September 23, 2020

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