Reliance Retail Ventures valuation hits $100 billion after KKR investment
Shares of Reliance Industries opened higher on September 12, a day after global investment firm KKR announced to have hiked its stake in Reliance Retail Ventures (RRVL).
The KKR deal makes RRVL one of the top four Indian companies in terms of equity value in the country.
KKR invested Rs 2,069.50 crore in RRVL at a pre-money equity value of Rs 8.361 lakh crore. This is essentially the same funding round as the one led by Qatar Investment Authority (QIA) in August 2023, which valued RRVL at Rs 8.27 lakh crore.
The current investment by KKR, combined with its investment made in 2020, will take its total equity stake in RRVL to 1.42 percent on a fully-diluted basis.
The previous fund-raise round by RRVL in 2020 from various global investors was done at a pre-money equity value of Rs 4.21 lakh crore.
The fresh investments come a month after the conglomerate announced that the shares held by minority investors in Reliance Retail Ltd would be cancelled and extinguished.
RRVL holds 99.91 percent of Reliance Retail with the remaining 0.09 percent being held by non-promoter shareholders.
The Ambani family is betting on the retail business to be the group’s most rapidly expanding business. This will be fuelled by Indians getting more affluent, the company opening more stores and making shopping easier on mobile and digital devices.
As of FY23, the retail business contributed 12 percent to the group’s EBITDA, up from 7 percent in FY19. The retail business expanded its network with over 3,300 new stores during the financial year 2023, taking the store tally to 18,040 stores pan-India. This marks a growth of about 22 percent YoY.
The investment by KKR and QIA is a vote of confidence in the growth prospects of Reliance Retail. The company is well-positioned to capitalize on the growing demand for retail in India.
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Market Update for September 22, 2023
IdeaForge Tech up 3.4% on order RVNL up 3% on highway MoU JSW Steel up 0.4% on sale ICICI Lombard down 1.6% on CEO exit ICICI Bank down 1% on healthcare investment NHPC up 1.3% on extended additional charge Kalyani Forge up 3.2% on new MD IRB Infra up 2.5% on road project closure
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