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Investment to fuel growth of India’s fast-growing retail sector

Mumbai, NFAPost: Reliance Industries Limited (“Reliance Industries”) and Reliance Retail Ventures Limited (“RRVL”) announced that Mubadala Investment Company (Mubadala), the Abu Dhabi-based sovereign investor, will invest Rs 6,247.5 crore (AED 3.1 billion) into Reliance Retail Ventures Limited (RRVL), a subsidiary of India’s Reliance Industries Limited (Reliance Industries).

The investment values Reliance Retail at a pre-money equity value of ₹ 4.285 lakh crore. Mubadala’s investment will translate into a 1.40% equity stake in RRVL on a fully diluted basis.

This marks the second significant investment by Mubadala in a Reliance Industries subsidiary after the US $1.2 billion investment in Jio Platforms announced earlier this year.

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

Inclusive strategy

Reliance Retail’s vision is to galvanise the Indian retail sector through an inclusive strategy that empowers millions of farmers and micro, small and medium enterprises. Working closely with global and domestic companies as a preferred partner, it aims to deliver immense benefits to Indian society, while protecting and generating employment for millions of Indians.

Reliance Retail, through its New Commerce strategy, has started a transformational digitalization of small and unorganized merchants and is committed to expanding the network numbering over 20 million businesses, giving them access to technology tools and efficient supply chain infrastructure that deliver superior value to their customers.

Commenting on the investment, Reliance Industries Chairman and Managing Director Mukesh Ambani said he is happy to welcome Mubadala as a valued investor in Reliance Retail Ventures.

Retail sector

“We value the partnership with a knowledge-rich organisation like Mubadala and acknowledge their confidence in our mission to strengthen the core of India’s retail sector – the millions of small retailers, merchants and shopkeepers – through the power of technology. Mubadala’s investment and guidance will be invaluable support in this journey,” said Reliance Industries Chairman and Managing Director Mukesh Ambani.

Mubadala Investment Company Managing Director and Group CEO Khaldoon Al Mubarak said the company is pleased to deepen its relationship with Reliance Industries through this investment in Reliance Retail Ventures.

“Their vision is the inclusive transformation of India’s consumer economy through the power of digitization, creating opportunities and market access for millions of small businesses across the country, and we are committed to supporting the company’s continuing development,” said Mubadala Investment Company Managing Director and Group CEO Khaldoon Al Mubarak.

The transaction is subject to regulatory and other customary approvals. Morgan Stanley acted as financial advisor to Reliance Retail and Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as legal counsels.

RIL is India’s largest private sector company, with a consolidated turnover of Rs 659,205 crore ($87.1 billion), cash profit of Rs 71,446 crore ($9.4 billion), and net profit of Rs 39,880 crore ($5.3 billion) for the year ended March 31, 2020.

Petrochemicals

RIL’s activities span hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, retail and digital services. RIL is the top-most ranked company from India to feature in Fortune’s Global 500 list of ‘World’s Largest Companies’ – currently ranking 96th. The company stands 71st in the ‘Forbes Global 2000’ rankings for 2019 – top- most among Indian companies. It ranks 10th among LinkedIn’s ‘The Best Companies to Work For In India’ (2019).

Reliance Retail Ventures Limited is a subsidiary of Reliance Industries Limited, and holding company of all the retail companies under the RIL Group. RRVL reported a consolidated turnover of ₹ 162,936 crore ($ 21.7 billion) and net profit of ₹ 5,448 crore ($ 726.4 million) for the year ended March 31, 2020.

Reliance Retail topped the list of ‘50 fastest-growing retailers globally between FY2013- 2018’ in the Deloitte’s Global Powers of Retailing 2020 index. Reliance Retail secured the 56th spot this year against the 94th rank the previous year and is the only Indian company to be featured in this list.

Financial retunrs

Mubadala Investment Company is a sovereign investor managing a global portfolio, aimed at generating sustainable financial returns for its shareholder, the Government of Abu Dhabi.

Mubadala’s US $232 billion portfolio spans over six continents with interests in multiple sectors and asset classes. We leverage our deep sectoral expertise and long-standing partnerships to actively source deals. Locally, in the UAE, we are driving sustainable growth by optimizing scale and efficiency, thereby supporting the continued diversification and global integration of the local economy while growing our shareholder value.

Headquartered in Abu Dhabi, Mubadala has offices in London, Rio de Janeiro, Moscow, New York, San Francisco and Beijing.

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