Mubadala to invest Dh3.1 billion in Reliance Retail Ventures
Investment to fuel growth of India's fast-growing retail sector.
Abu Dhabi state fund Mubadala confirmed on Thursday that it had picked up 1.4 per cent stake in Reliance Retail Ventures (RRVL) for Dh3.1 billion, marking its second significant investment in three months in Reliance Group controlled by Asia's richest man, Mukesh Ambani.
Mubadala is the fourth global investor in RRVL, which already has secured around $2.67 billion from KKR & Co, Silver Lake Partners and General Atlantic in deals, valuing it at a pre-money equity value of Rupees 4.285 trillion.
The latest investment venture by Mubadala in India comes less than five months after it invested around $1.2 billion in Jio Platforms, a digital service company controlled by Reliance Group. The Abu Dhabi Investment Authority, which has assets estimated at around $700 billion, also bought a 1.16 per cent stake in Jio for $752 million.
Reliance Retail Limited, a subsidiary of RRVL, operates India's fastest-growing and most profitable retail business serving close to 640 million footfalls across its 12,000 stores nationwide.
"[Reliance's] vision is the inclusive transformation of India's consumer economy through the power of digitization, creating opportunities and market access for millions of small businesses across the country, and we are committed to supporting the company's continuing development," said Khaldoon Al Mubarak, managing director and Group CEO of Mubadala, which manages around $240 billion in assets.
Mukesh Ambani, chairman and managing director of Reliance Industries, said he is happy to welcome Mubadala as a valued investor in Reliance Retail Ventures. "We value the partnership with a knowledge-rich organization like Mubadala and acknowledge their confidence in our mission to strengthen the core of India's retail sector - the millions of small retailers, merchants and shopkeepers - through the power of technology. Mubadala's investment and guidance will be an invaluable support in this journey."
The transaction is subject to regulatory and other customary approvals.
Morgan Stanley acted as financial advisor to Reliance Retail and Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as legal counsel.
Reliance targets to offload 15-20 per cent stake in RRVL to raise up to Rs800 billion. The retail giant recently announced its acquisition of the retail, logistics and warehousing business of Future Group for Rs247.13 billion. Reliance will also pick up a 13 per cent stake in Kishore Biyani's remaining business under Future Enterprises Ltd.
Ambani's push to seek investments in its retail business come as the oil-to-telecoms Indian conglomerate has been looking to expand its e-commerce operations to compete against Walmart's Flipkart and Amazon.com's Indian business. Flipkart, India's leading ecommerce marketplace, is majority-owned by Walmart through a $16 billion acquisition in 2018.
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