KKR’s Substantial Investment Values Reliance Retail Ventures Among India’s Top Four Companies

Reliance Retail Ventures Limited (RRVL), a subsidiary of Reliance Industries Limited, has announced a significant investment from global investment firm KKR. Through an affiliate, KKR will invest ₹2,069.50 crore in RRVL, further solidifying their partnership. This investment underscores the growing importance of RRVL in the Indian retail sector and values the company at a pre-money equity value of ₹8.361 lakh crore, placing it among the top four companies in India by equity value.

KKR’s follow-on investment will result in an additional equity stake of 0.25% in RRVL on a fully-diluted basis. When combined with KKR’s previous investment of ₹5,550 crore in RRVL in 2020, their total equity stake in RRVL will reach 1.42% on a fully-diluted basis. In 2020, RRVL raised ₹47,265 crore from various global investors at a pre-money equity value of ₹4.21 lakh crore.

RRVL, along with its subsidiaries and associates, operates the largest, fastest-growing, and most profitable retail business in India. With an integrated omni-channel network of over 18,500 stores and digital commerce platforms, RRVL serves 267 million loyal customers across various segments, including grocery, consumer electronics, fashion & lifestyle, and pharma consumption baskets.

The company’s vision is centered around revitalizing the Indian retail sector through an inclusive approach. RRVL aims to empower micro, small, and medium enterprises (MSMEs) while fostering strong partnerships with global and domestic companies. This strategy is designed to deliver significant benefits to Indian society and generate employment opportunities for millions of Indians. RRVL’s New Commerce business has successfully digitized over 3 million small and unorganized merchants, equipping them with technology tools and efficient supply chain infrastructure to enhance their offerings to customers.

Isha Mukesh Ambani, Director of Reliance Retail Ventures Limited, expressed her satisfaction with KKR’s continued support, emphasizing the deepening partnership between the two entities. She noted KKR’s belief in RRVL’s vision and capabilities, highlighting the collaborative engagement with KKR as a valuable asset for RRVL’s transformation of the Indian retail sector.

Joe Bae, Co-CEO of KKR, commended RRVL’s vision and dedication to digitalizing and empowering retailers across India. He praised RRVL’s resilience and performance, even in the face of the pandemic and other disruptions, and expressed KKR’s commitment to supporting RRVL’s mission to create a more inclusive Indian retail economy.

Gaurav Trehan, Head of Asia Pacific Private Equity and Head of India at KKR, recognized RRVL as a corporate leader and innovator in India, highlighting the company’s potential to digitalize and revolutionize the Indian retail industry. He expressed KKR’s enthusiasm for continued collaboration and growth opportunities with RRVL. KKR’s investment primarily originates from its Asian Fund IV and is subject to regulatory and customary approvals.

Morgan Stanley served as the financial advisor to Reliance Retail Ventures Limited, while Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as legal counsels, facilitating this significant investment. This investment signifies a vote of confidence in RRVL’s mission and its pivotal role in India’s rapidly evolving retail landscape, with far-reaching implications for the country’s economy.

FAQs related to KKR and Reliance Retail Ventures Limited (RRVL)

1. What is the investment amount that KKR is making into Reliance Retail Ventures Limited (RRVL)?

  • KKR is investing ₹2,069.50 crore into RRVL.

2. What is the valuation of RRVL after KKR’s investment?

  • The investment values RRVL at a pre-money equity value of ₹8.361 lakh crore.

3. How much equity stake will KKR hold in RRVL after this investment?

  • KKR’s follow-on investment will give them an additional equity stake of 0.25% in RRVL on a fully-diluted basis, making their total equity stake 1.42%.

4. What types of businesses does RRVL operate in?

  • RRVL operates in various sectors, including grocery, consumer electronics, fashion & lifestyle, and pharma consumption baskets.

5. How many loyalty customers does RRVL serve?

  • RRVL serves 267 million loyalty customers.

6. What is RRVL’s vision for the Indian retail sector?

  • RRVL’s vision is to galvanize the Indian retail sector through an inclusive strategy, empowering micro, small, and medium enterprises (MSMEs) and working closely with global and domestic companies.

7. Where is KKR’s investment primarily coming from?

  • KKR’s investment primarily comes from its Asian Fund IV.

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