SUMMARY
Qatar Investment Authority will acquire 0.99% stake in INR 8,278 Cr in Reliance Retail at a pre-money equity value of INR 8.3 Lakh Cr
Reliance Retail operates an integrated omnichannel network of over 18,500 stores and digital commerce platforms through its subsidiaries and affiliates across categories
At a time when competition in digital businesses is heating up, the funding is likely to further help Reliance Retail, which owns AJIO, JioMart, Netmeds, among others, strengthen its offerings
Qatar Investment Authority, through a wholly-owned subsidiary, is set to invest INR 8,278 Cr into Reliance Retail Ventures Limited (RRVL), the retail subsidiary of Reliance Industries Limited (RIL), at a pre-money equity value of INR 8.3 Lakh Cr.
RRVL operates an integrated omnichannel network of over 18,500 stores and digital commerce platforms through its subsidiaries and affiliates across categories like grocery, consumer electronics, fashion and lifestyle, and pharma. The RIL subsidiary has partnerships with over 3 Mn merchants through its new commerce initiative.
Reliance Retail owns brands such as AJIO, JioMart, Netmeds, Milkbasket and Trends. It also owns a minority stake in quick-commerce startup Dunzo.
Qatar Investment Authority’s investment will translate into a minority equity stake of 0.99% in RRVL on a fully-diluted basis, RIL said in a statement.
“We look forward to benefitting from QIA’s global experience and strong track record of value creation as we further develop Reliance Retail Ventures Limited into a world class institution, driving transformation of the Indian retail sector,” said Isha Mukesh Ambani, director of RRVL.
RRVL last raised an aggregate amount of INR 47,265 Cr in 2020 from various global investors at a pre-money equity value of INR 4.2 Lakh Cr.
Reliance’s digital and new commerce businesses contributed 18% to the total revenue of Reliance Retail in Q1 FY24. The retail arm’s net profit stood at INR 2,448 Cr in Q1 and its operating revenue at INR 62,159 Cr.
While the retail arm’s grocery business grew 59% year-on-year (YoY), its consumer brands vertical saw an 8X jump in revenue YoY.
RRVL claims that it has digitised over 3 Mn small and unorganised merchants through its new commerce business.
Commenting on the investment, Mansoor Ebrahim Al-Mahmoud, CEO of Qatar Investment Authority, said it looks forward to RRVL joining its growing and diverse portfolio of investments in India, supported by the company’s impressive growth trajectory.
The retail arm of the Mukesh Ambani-led conglomerate is now looking to further galvanise the Indian retail sector through an inclusive strategy by empowering more micro, small and medium enterprises (MSMEs) and also working closely with both global and domestic companies as preferred partners.
Earlier this year, fast fashion brand Shein reentered India in a partnership with RRVL.
RRVL also entered into the beauty and personal care (BPC) space in the country with the recent launch of its brand Tira, posing significant competition to Nykaa.
RRVL has also actively expanded its portfolio through multiple acquisitions, including V Retail and Insight Cosmetics, in the recent past.
Brokerage Bernstein said in a recent research report that RRVL continues to be the best-positioned player in the Indian ecommerce market.
