KKR Continues to Back Reliance Retail with ₹2,069.50 Cr Investment

Reliance Retail Ventures Limited (RRVL), a subsidiary of Reliance Industries Limited, announced a substantial investment from global investment firm KKR. Through an affiliate, KKR is set to invest a staggering ₹2,069.50 crore into RRVL. This infusion of funds has led to the valuation of RRVL skyrocketing to a pre-money equity value of ₹8.361 lakh crore, firmly establishing it among the top four companies in India by equity value.

This latest investment marks KKR's continued support for RRVL, building on its prior investment of ₹5,550 crore in 2020. KKR's follow-on investment will translate into an additional equity stake of 0.25% in RRVL on a fully diluted basis, bringing its total equity stake in RRVL to 1.42%.

RRVL had raised an impressive ₹47,265 crore in 2020 from various global investors at a pre-money equity value of ₹4.21 lakh crore. The remarkable surge in valuation reflects the company's relentless growth and its ambition to revolutionize the Indian retail sector.

Reliance Retail Ventures' Envisioned Transformation

RRVL, through its subsidiaries and associates, currently operates India's largest and most profitable retail business. Serving a whopping 267 million loyal customers, it boasts an integrated omnichannel network with over 18,500 stores and digital commerce platforms spanning various categories, including grocery, consumer electronics, fashion & lifestyle, and pharma consumption baskets.

At the heart of RRVL's vision is the galvanization of the Indian retail sector through inclusivity. The company is committed to serving millions of customers while empowering micro, small, and medium enterprises (MSMEs). It seeks to collaborate closely with global and domestic companies as a preferred partner to deliver substantial benefits to Indian society, all while generating employment opportunities for millions of Indians.

RRVL's New Commerce business has been instrumental in digitizing over 3 million small and unorganized merchants, equipping them with technology tools and an efficient supply chain infrastructure to offer a superior value proposition to their customers.

Leaders' Perspectives

Isha Mukesh Ambani, Director of Reliance Retail Ventures Limited, expressed her delight at the continued support from KKR. She highlighted the deepening partnership and KKR's unwavering belief in RRVL's vision and capabilities. She also emphasized the anticipation of continued engagement with KKR, leveraging their global platform, industry knowledge, and operational expertise to drive the transformation of the Indian retail sector.

Joe Bae, Co-CEO of KKR, commended RRVL's vision and its remarkable efforts to empower retailers across India through digitalization. He noted the company's resilience and outstanding performance, even in the face of the pandemic and other disruptions. Bae reiterated KKR's commitment to working alongside the RRVL team to support the mission of building a more inclusive Indian retail economy.

Gaurav Trehan, Head of Asia Pacific Private Equity and Head of India at KKR, lauded RRVL as a corporate leader and innovator in India. He emphasized that RRVL's unique model has the potential to digitalize and transform the country's retail industry, and KKR is excited to continue collaborating with the company. KKR's investment primarily originates from its Asian Fund IV, subject to regulatory and customary approvals. 

Reliance Retail Ventures: A Powerhouse

Founded in 1976, KKR manages approximately $519 billion in assets as of June 30, 2023. The continued investment in RRVL underscores KKR's strong relationship with Reliance Industries Limited. In addition to its investment in RRVL, KKR is also an investor in Jio Platforms Limited, the telecom platform of Reliance Industries Limited.

Reliance Retail Ventures: A Retail Giant

Reliance Retail Ventures, under the leadership of Isha Ambani, has established itself as India's foremost retail business. With over 18,000 stores, it competes in various sectors, including groceries, consumer electronics, fashion & lifestyle, and more, going head-to-head with global giants like Amazon and Walmart's Flipkart.

The company reported a consolidated net profit of ₹91.81 billion for the financial year ending in March 2023, on revenue of ₹2.6 trillion. Reliance's strategic acquisitions of numerous small grocery and non-food brands signify its ambition to create a consumer business with annual sales of $6 billion within five years, challenging international behemoths like Unilever.

A Historic Valuation Milestone

This latest investment by KKR at a valuation of ₹8.36 lakh crore marks a historic milestone for Reliance Retail Ventures. Notably, it surpasses the ₹8.27 lakh crore valuation achieved just three weeks prior when Qatar's sovereign investment fund, QIA, acquired a 0.99% stake in the company for ₹8,278 crore.

KKR's initial investment of ₹5,550 crore in 2020 valued Reliance Retail at ₹4.21 lakh crore. This recent investment effectively doubles the company's valuation since KKR's first investment three years ago.