The Qatar Investment Authority (QIA) will invest $1 billion or Rs 8,278 crore in Reliance Retail Ventures Ltd (RRVL) to pick up a stake of nearly one percent, as per a release issued by the retail arm of Reliance Industries Ltd (RIL) on August 23.
The investment values the company at a pre-money equity value of $100 billion or Rs 8.27 lakh crore, RRVL stated, adding that "QIA’s investment will translate into a minority equity stake of 0.99 percent on a fully-diluted basis".
RRVL director Isha Ambani said the investment is a "strong endorsement of a positive outlook towards Indian economy and Reliance’s retail business model, strategy and execution capabilities". The company will benefit from QIA’s "global experience and strong track record of value creation", she added.
For this transaction, Morgan Stanley acted as financial advisor to RRVL and Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as legal counsels for the company, the release noted. AZB and Cleary Gottlieb acted as legal counsel for QIA.
The deal comes as the Mukesh Ambani-led conglomerate is also considering a public listing for Reliance Retail and has started buying back shares in the unit and giving them to their employees as stock options.
The subsidiary headed by Ambani’s daughter, Isha, has undertaken a swath of recent acquisitions as it is taking on global rivals such as Amazon.com Inc., and Walmart Inc.’s Indian unit Flipkart Online Services Pvt.
RRVL, in its previous fund-raise round in 2020, drew an aggregate amount of Rs 47,625 crore from various global investors, including the sovereign wealth funds of Saudi Arabia, Singapore and the United Arab Emirates, along with General Atlantic, KKR & Co. and Silver Lake Partners. The fund-raising was done at a pre-money equity value of Rs 4.21 lakh crore.
QIA chief executive officer Mansoor Ebrahim Al-Mahmoud, while commenting on the decision to pick up 0.99 percent stake in RRVL, said the Qatar-based investment vehicle is committed to "supporting
innovative companies with high-growth potential in India’s fast growing retail market".
"We are looking forward to Reliance Retail Ventures Limited, with its strong vision and impressive growth trajectory, joining our growing and diverse portfolio of investments in India," he added.
The investment in RRVL is also the latest foray by Qatar’s sovereign wealth fund into a family-led Indian conglomerate this year. QIA increased its bets in the South Asian nation having picked up a 2.7 percent stake in fellow Indian billionaire Gautam Adani’s green energy business after the tycoon was hit by a damaging short-seller attack in January.
With Bloomberg inputs
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