KKR picks up stake in RIL’s retail unit

THE LATEST TRANSACTION BRINGS THE TOTAL FUNDING INTO RELIANCE RETAIL VENTURES LTD TO ₹13,050 CRORE

MUMBAI: Mukesh Ambani’s fundraising spree shows no signs of slowing.

On Wednesday, Reliance Industries Ltd said it has raised ₹5,550 crore by selling a 1.28% stake in its retail business to US private equity (PE) firm KKR and Co., as India’s most valuable company creates a war chest for its push into e-commerce.

The latest transaction, the second such in about two weeks, brings the total funding into Reliance Retail Ventures Ltd (RRVL) to ₹13,050 crore and follows a record ₹1,52,056 crore of investments into its digital assets unit, Jio Platforms Ltd, earlier this year.

On September 9, Californiabased PE fund Silver Lake picked up a 1.75% stake in RRVL for ₹7,500 crore.

Ambani, the world’s fourthrichest man, is betting his company’s future on retail and digital platforms, reducing the emphasis of its mainstay chemicals and refining business. With an eye on the rapidly growing e-commerce segment, Reliance Retail ventured into online food and grocery delivery business in May through JioMart.

The KKR investment values RRVL at an equity value of ₹4.21 lakh crore, Reliance Industries Ltd said. The private equity firm had also bought a 2.32% stake in Jio Platforms for ₹11,367 crore.

Mint on September 10 reported that RRVL is in talks with KKR to raise over ₹5,000 crore.

“We look forward to working with KKR’s global platform, industry knowledge and operational expertise across our digital services and retail businesses,” said Ambani, chairman and managing director, RIL.

Reliance Retail operates India’s largest retail business with 12,000 stores, clocking nearly 640 million footfalls.

It is the holding firm for Reliance Retail Ltd and Reliance Brands, which operates joint ventures with global brands.

As part of its new commerce strategy, Reliance Retail is onboarding small and unorganised merchants to expand its network to over 20 million.

“Reliance Retail’s new commerce platform is filling an important need for consumers and small businesses as more consumers move to shopping online and the company offers tools for kiranas to be a critical part of the value chain,” said Henry Kravis, co-founder and co-CEO of KKR.

Rupen Jhaveri, managing director, private equity, KKR India said the firm is focused on two investing themes: consumption upgrade and digital transformation.

“Our investment in Reliance Retail is predicated on their strong physical presence coupled with a solid new commerce strategy and backed by a robust supply chain infrastructure,” he said.

KKR is making the investment from its Asia private equity funds.