Reliance Retail will sell 1.28% stake to KKR & Co

American private equity firm KKR & Co will invest $775.09 million in India’s Reliance Retail Ventures for a 1.28 percent share in the group.

Reliance Retail Ventures Limited (RRVL), the subsidiary of Reliance Industries Ltd (RIL) operates India’s largest retail business, serving about 12,000 stores in 7000 cities of India and the current deal makes KKR & Co the second investor to be hooked up with the company in a month.

The investment values India’s largest retail wing at a pre-money equity value of about $57.2 trillion, RIL mentioned in an exchange filing made today.

The oil-to-telecom industry owned by the Asian-billionaire Mukesh Ambani is looking forward to expanding its retail business to compete with its rivals such as Amazon and Walmart-owned Flipkart in India’s huge market.

This is the second investment made by the KKR in Reliance group, earlier in May 2020 the US-based equity firm had invested $1.5 billion in the digital business of Indian conglomerate. The firm will make the investment from its Asia private equity fund. 

As part of a fundraising mission by the RIL for Reliance Digital, more than $20 billion were raised from investors including the tech giants Facebook Inc and Alphabet Inc’s Google. 

Early this month, private equity giant Silver Lake Partners had invested $1.02 billion in the Reliance Retail Ventures for its 1.75 percent worth stake.

“Reliance Retail’s new commerce platform is filling an important need for both consumers and small businesses as more Indian consumers move to shop online and the company offers tools for small stores to be a critical part of the value chain.”

Mukesh Ambani, Chairman and Managing Director of Reliance Industries expressed his pleasure in partnering with KKR and expects to utilize KKR’s global platform, industry knowledge and operational expertise across their digital services and retail businesses.

The global investment bank Morgan Stanely was the financial adviser of Reliance Retail while the accounting organization Deloitte Touche Tohmatsu India LLP acted as KKR’s guide for the deal.