KKR's Big Bet On Reliance Retail Continues With A Fresh Investment Of $250 Million

Global investment firm KKR has increased its investment in Reliance Retail Ventures, the retail arm of Indian billionaire Mukesh Ambani's conglomerate, by injecting an additional $250 million.

This additional investment values Reliance Retail at a remarkable $100 billion, reflecting KKR's growing interest in India's largest retailer.

KKR's follow-on investment equates to an additional equity stake of 0.25 per cent in Reliance Retail on a fully diluted basis, bringing KKR's total equity stake in the company to 1.42 per cent.

This investment underscores the attractiveness of Ambani's diverse retail operations, spanning from groceries to electronics and boasting international partnerships with brands like Jimmy Choo, Marks & Spencer, and Pret A Manger.

With over 18,000 stores, Reliance Retail is a formidable competitor to global giants like Amazon and Walmart's Flipkart.

In 2020, Reliance Retail raised a substantial $5.71 billion by selling a 10.09 per cent stake to a group of investors, including KKR, the Saudi Public Investment Fund, General Atlantic, and the United Arab Emirates' Mubadala. KKR's 2020 investment amounted to 55.5 billion rupees ($669 million at current exchange rates).

Ambani recently noted that this fundraising round valued the retail business at approximately $52 billion. In less than three years, the valuation of Reliance Retail has nearly doubled.

KKR's latest investment primarily originates from its Asian Fund IV, and the transaction is contingent on regulatory approvals, as confirmed by Reliance. Morgan Stanley served as the financial adviser to Reliance Retail, as reported by Asia Nikkei.

Earlier this month, Reuters reported exclusively that Reliance was in advanced discussions with global investors to raise approximately $2.5 billion by the end of September, signaling its intentions for a potential stock market listing.

Ambani had previously stated in 2019 that the group aimed to list the retail business within five years.

This fundraising endeavor is part of Reliance's larger goal of raising $3.5 billion, of which it recently secured $1 billion from the Qatar Investment Authority, valuing the company at $100 billion.

Reliance Retail reported a consolidated net profit of 91.81 billion rupees for the fiscal year ending in March 2023, with total revenue amounting to 2.6 trillion rupees.

Since the previous year, Reliance has been actively acquiring numerous small grocery and non-food brands, strategically building a consumer business with an ambitious target of achieving annual sales of $6 billion within five years, positioning itself to compete with global giants like Unilever.