GIC and TPG pick up stake in Mukesh Ambani’s Reliance Retail; to invest combined Rs 7,350 cr

Representational image. CNBC-TV18

Singapore’s sovereign wealth fund GIC and Global alternative asset firm TPG are set to pickup stakes in Reliance Industries Ltd (RIL)’s retail arm. The two mega investment firms will put in a combined amount of Rs 7,350 crore.

Through two separate deals, Reliance Industries will sell 1.63 percent stake in Reliance Retail Ventures Limited (RRVL). GIC will invest Rs 5,512.5 crore for 1.22 percent share in RRVL, while TPG will invest Rs 1,837.5 crore to buy 0.41 percent stake in the retail arm.

The investments value Reliance Retail at a pre-money equity value of Rs 4.285 lakh crore. In less than three days, Reliance Industries has entered into five deals to sell stake in RRVL.

Earlier, on 1 October, RIL announced Abu Dhabi-based sovereign wealth fund Mubadala Investment Co would invest Rs 6,247.5 crore to buy a 1.4 percent stake in its retail arm.

On 30 September, global private equity firm General Atlantic picked up a 0.84 percent stake in the company for Rs 3,675 crore.

Also, US PE investor Silver Lake made a second investment of Rs 1,875 crore, taking its total fund infusion in Reliance Retail to Rs 9,375 crore for a 2.13 percent stake.

KKR previously took a 1.28 percent stake in the firm for Rs 5,550 crore.

Commenting on the development, Mukesh Ambani, the chairman and managing director of Reliance Industries, said, “I am delighted that GIC, with its track record of close to four decades of successful long-term value investing across the world, is partnering with Reliance Retail in its mission to transform the Indian retail landscape.”

GIC’s global network and track record of long-term partnerships will be invaluable to the transformation story of Indian Retail. This investment is a strong endorsement of our strategy and India’s potential, he said.

GIC Chief Executive Officer Lim Chow Kiat said: GIC is pleased to partner with Reliance through this new investment, which will enable the company to position Reliance Retail for the strong secular growth in India’s retail market.

On the TPG deal, Isha Ambani, Director of Reliance Retail, said, “We are delighted to welcome TPG to the Reliance Retail family in our journey of revolutionizing the Indian Retail landscape and improving the economic prospects of millions of merchants and enhancing the consumer experience. TPG’s rich experience will be invaluable to the Reliance Retail mission.”

Besides Silver Lake, KKR, General Atlantic and Mubadala, the other investors in Jio Platforms which houses India’s youngest but largest telecom operator Jio include Facebook and Google.

It is worth noting that Reliance had recently acquired the retail, wholesale, logistics and warehouse businesses of Future Group for an enterprise value of Rs 24,173 crore.

The firm also in May launched JioMart, its e-commerce platform.

Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd