RIL up 3% as Abu Dhabi Investment Authority picks stake in Reliance Retail

Shares of Reliance Industries (RIL) gained 3 per cent to Rs 2,287.50 on the BSE on Wednesday after the company said Abu Dhabi Investment Authority (ADIA) will invest Rs 5,512.50 crore into the company’s subsidiary Reliance Retail Ventures (RRVL) for 1.2-per cent stake. RIL’s stock had hit a record high of Rs 2,368.80, hit on September 16, 2020.
This is the seventh deal to be announced by the Mukesh Ambani-led firm in four weeks, stepping up its stake-sale process that has seen marquee investors back the firm so far. With this investment, RRVL has raised Rs 37,710 crore from leading global investors including Silver Lake, KKR, General Atlantic, Mubadala, GIC, TPG, and ADIA in less than four weeks.

Reliance Retail, a subsidiary of RRVL, operates India’s largest, fastest-growing and most profitable retail business serving close to 640 million footfalls across its around 12,000 stores nationwide.

“Reliance Retail has rapidly established itself as one of the leading retail businesses in India and, by leveraging both its physical and digital supply chains, is strongly positioned for further growth. This investment is consistent with our strategy of investing in market-leading businesses in Asia linked to the region’s consumption-driven growth and rapid technological advancement,” said Hamad Shahwan Aldhaheri, Executive Director of the Private Equities Department at ADIA.

Meanwhile, according to a Business Standard report, RRVL is expected to divest only a small stake of 10-15 per cent in its retail holding company, the proceeds of which will be used to fund acquisitions such as the retail and wholesale business of Future Group and others. As part of its initial and ongoing fund-raising exercise, RRVL has already divested 8.48 per cent stake to a bevvy of private equity funds for Rs 37,710 crore