Mubadala to invest Rs 6,247.5 crore in Reliance Retail for 1.4 per cent stake

New Delhi: Reliance Industries said on Thursday Abu Dhabi’s sovereign fund, Mubadala Investment Co, would invest Rs 6,247 crore in Reliance Retail Ventures, becoming the latest in a bevy of global funds injecting billions of dollars in the holding entity of India’s largest retailer.
The deal will give Mubadala a 1.4% stake, valuing Reliance Retail before the investment at Rs 4.28 lakh crore.

The latest deal has taken the total overseas investments announced in Reliance Retail in the past three weeks to nearly Rs 24,850 crore, for a 5.65% stake, making the company one of the hottest global investment destinations in recent months.

On Wednesday, Reliance announced Rs 5,500 crore of investment in the retail venture — Rs 3,675 crore from General Atlantic and Rs 1,875 crore from Silver Lake.

The new funding from Silver Lake is in addition to the Rs 7,500 crore it had earlier agreed to invest. Reliance had earlier also announced an investment of Rs 5,550 crore from KKR.

These are also the second round of investments by all the four global funds in a Reliance entity. They had invested in Jio Platforms, the digital business of the conglomerate that raised $20 billion earlier this year from global funds and US technology companies Facebook and Google.

They are now buying into India’s burgeoning retail story, where the Mumbai conglomerate is poised for a bigger play with its huge network of brick-and-mortar stores and the newly launched JioMart ecommerce venture.

Reliance Retail has also agreed to acquire the business of rival Future Group, which would help consolidate its control to more than a third of India’s estimated $80 billion annual modern retailing market.

The investments are part of Reliance’s plan to raise Rs 60,000-63,000 crore by selling a 15% stake in the retail venture.

Its plan includes inducting an overseas strategic investor into the company, ET had reported last month. Morgan Stanley was the financial adviser to Reliance Retail for the deal, while Cyril Amarchand Mangaldas and Davis Polk & Wardwell were its legal counsels, the company said in a news release.