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Abu Dhabi’s Mubadala to invest $853 mn in RIL’s retail unit
Photo Credit: VCCircle

Reliance Industries Ltd said Thursday Mubadala Investment Company will invest Rs 6,247.5 crore ($853 million) in Reliance Retail Ventures Ltd, making the Abu Dhabi sovereign wealth fund the fourth investor in the unit.

Mubadala’s investment will translate into a 1.4% stake in Reliance Retail Ventures on a fully diluted basis, billionaire Mukesh Ambani-led RIL said in a statement.

The investment values Reliance Retail at a pre-money equity valuation of Rs 4.285 trillion.

This is Mubadala’s second investment in an RIL subsidiary; it had earlier announced a $1.2 billion investment in Jio Platforms Ltd.

Overall, Mubadala is the fourth investor in Reliance Retail, after private equity firms General Atlantic, KKR & Co. Inc and Silver Lake Partners.

General Atlantic will invest Rs 3,675 crore in Reliance Retail, KKR Rs 5,550 crore and Silver Lake 7,500 crore in the energy-to-telecom conglomerate’s retail business. Silver Lake’s co-investors are putting in an additional Rs 1,875 crore. Like Mubadala, all three PE firms have also backed Jio Platforms.

Overall, RIL raised more than $20 billion from 13 investors for Jio Platforms. Apart from the four investors cited above, the list included Google and Facebook.

RIL, India’s biggest company by market value, has been expanding its retail business as well as its telecom and digital services operations as it diversifies away from its core energy business.

Last month, the conglomerate agreed to acquire Future Group’s retail business in a multi-billion-dollar deal. It also recently bought a majority stake in online pharmacy Netmeds for Rs 620 crore.

Reliance Retail Ventures is the holding company of Reliance Retail Ltd, India’s largest bricks-and-mortar retailer. It reported a consolidated turnover of Rs 162,936 crore and a net profit of Rs 5,448 crore for the year ended March 31, 2020.

In June, RIL said it had become net-debt free through stake sales in Jio Platforms and a rights issue worth $7 billion. At the time, Ambani said strong investor interest in Jio Platforms and RIL’s consumer businesses would help the two units move towards a public listing in the next five years.

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