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RIL share price gains 3% on investment by KKR in retail unit

This investment values Reliance Retail at a pre-money equity value of Rs 4.21 lakh crore.

September 23, 2020 / 12:19 PM IST

Reliance Industries (RIL) share price gained 3 percent in early trade on September 23 after the announcement global investment firm KKR will invest Rs 5,550 crore in the company's retail subsidiary.

American buyout firm KKR & Co will invest Rs 5,550 crore in the company's subsidiary Reliance Retail Ventures in exchange for a 1.28 percent stake, the second deal stitched up by the Reliance Industries Ltd (RIL) unit in as many weeks.

Also read: Silver Lake to invest in Reliance Retail, buys 1.75% stake for Rs 7,500 crore

This 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 Reliance Industries, following a Rs 11,367 crore investment in Jio Platforms announced earlier this year.

Also Read - KKR-Reliance Retail deal: Here's all you need to know about the private equity giant

5 things to know about KKR-Reliance Retail deal

Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said, “I am pleased to welcome KKR as an investor in Reliance Retail Ventures as we continue our onward march to growing and transforming the Indian Retail ecosystem for the benefit of all Indians.”
 Private equity giant Silver Lake Partners said on September 9 that it will invest Rs 7,500 crore in Reliance Retail, India’s biggest brick-and-mortar retail business, for a 1.75 percent stake.

"The second stake sale in the retail business is credit positive as it signals that the company continues to further improve its already strong capital structure," said Sweta Patodia, Analyst, Corporate Finance Group, Moody’s Investors Service.

"The stake sale also reinforces the valuation set by the previous deal with Silver Lake and will allow the company to further monetize its retail business, if it decides to do so," she added.

At 09:16 hrs, Reliance Industries was quoting at Rs 2,268.00, up Rs 56.85, or 2.57 percent on the BSE.

Disclaimer: Reliance Industries Ltd., which also owns Jio, is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.

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Moneycontrol News
first published: Sep 23, 2020 09:21 am
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