On Monday, September 11, Reliance Industries Ltd (RIL) announced that KKR, a global investment major, will be acquiring a 0.25% ownership stake in its subsidiary, Reliance Retail Ventures Ltd (RRVL), focused on retail and digital commerce. This transaction amounts to INR 2,069.5 Crores, and it values the retail giant at an impressive INR 8.36 Lakh Crores.
RIL has stated that KKR intends to expand its investment in RRVL through an affiliated entity, ultimately raising its overall ownership in the company to 1.42%.
“We highly value our deepening partnership with KKR, and their latest investment in RRVL after their previous investment further reinforces their strong belief in RRVL’s vision and capabilities. We look forward to continued engagement with KKR and to benefit from their global platform, industry knowledge and operational expertise, in our journey towards driving transformation of the Indian retail sector,” RRVL director Isha Ambani said.
With this capital injection, KKR’s cumulative investment in RRVL will reach INR 7,619.5 Crores. Back in 2020, KKR had invested INR 5,550 Crores to secure a 1.17% stake in the company. During that period, RIL’s retail division was appraised at a pre-money equity valuation of INR 4.21 Lakh Crores.
Commenting on the fundraise, KKR co-chief executive officer (CEO) Joe Bae said, “Throughout our investment period in Reliance Retail, we have been impressed by the company’s vision and extensive work to empower retailers across India through digitalization, as well as by its resilience and performance in spite of the pandemic and other disruptions.”
Under its corporate umbrella, RRVL encompasses brands like AJIO, JioMart, Netmeds, Milkbasket, and Trends. Additionally, the company holds a minority interest in the challenged quick commerce startup, Dunzo. RRVL asserts an extensive omnichannel network comprising over 18,500 stores and digital commerce platforms that span various segments.
The capital infusion comes days after Qatar Investment Authority revealed its commitment to invest INR 8,278 Crores in RRVL, setting the pre-money equity value of the company at INR 8.3 Lakh Crores.
This development coincides with RRVL’s ongoing expansion efforts, characterized by new product launches and the inclusion of an increasing number of micro, small, and medium enterprises (MSMEs).
Whether it’s the relaunch of Shein in the Indian market or venturing into the beauty and personal care (BPC) sector with Tira, RRVL has diversified across various segments. In doing so, it has presented a significant challenge to the ecommerce domain, which has typically been dominated by startups.
Just last week, RRVL made headlines by revealing its acquisition of a majority 51% stake in the kids-wear and maternity-wear brand, Ed-a-Mamma, founded by actor Alia Bhatt.
In the first quarter of the fiscal year 2023-24, RRVL recorded a net profit of INR 2,448 Crores and generated INR 62,159 Crores in operating revenue. Notably, digital and new commerce segments contributed 18% of the total revenue for the quarter.