US private equity firm KKR invests in Reliance Retail
US private equity firm KKR is investing Rs 5,550 crore to buy a 1.28 per cent in the retail arm of Reliance Industries Ltd (RIL) as the oil-to-telecom conglomerate continues its fund raising exercise.
The latest investment comes days after Silver Lake picked up 1.75 per cent in Reliance Retail Ventures Ltd (RRVL) by investing Rs 7,500 crore. Like Silver Lake, KKR’s investment values Reliance Retail at a pre-money equity value of Rs 4.21 lakh crore.
This marks the second investment by KKR in a subsidiary of RIL, following a Rs 11,367-crore investment in Jio Platforms announced earlier this year for a 2.32 per cent stake.
Reliance Retail Ltd, a subsidiary of RRVL, operates India’s largest and most profitable retail business with close to 640 million footfalls across 12,000 stores nationwide. The retail arm, through its new commerce platform, has started digitalisation of small and unorganised merchants and has announced plans to expand the network to over 20 million. This is expected to enable the merchants to use technology tools and an efficient supply chain infrastructure to deliver a superior value proposition to their own customers.
Founded in 1976, KKR has $222 billion in assets under management as on June 30, 2020. It has made investments in Epic Games, OutSystems, Internet Brands, Go-jek and Voyager Innovations.
KKR set up its first of eight Asia offices in 2005 and the firm now has around $5.1 billion in private equity investments across more than 15 Indian companies, including Jio Platforms, JB Chemicals, Max Healthcare, Eurokids International and Ramky Enviro Engineers.
“KKR has a proven track record of being a valuable partner to industry-leading franchises and has been committed to India for many years. We look forward to working with KKR’s global platform, industry knowledge and operational expertise across our digital services and retail businesses,” Mukesh Ambani, chairman and managing director of RIL.
IRIL has mobilised over Rs 1.52 lakh crore from these investors in the digital services subsidiary, most of which was used to retire debt. However, RIL is expected to use the proceeds from the stake sale in RRVL to use it in the organised retail business.
“Reliance Retail’s new commerce platform is filling an important need for both consumers and small businesses as more Indian consumers move to shopping online,” said Henry Kravis, co-founder and co-CEO of KKR.