Reliance Retail Ventures in talks with investors to raise another $2.5 bn

According to a Reuters report, the company intends to raise $2.5 billion, which is part of a combined target of $3.5 billion, and plans to complete this exercise by the end of the quarter

Reliance Retail Ventures Ltd (RRVL), the retail arm of Reliance Industries, is said to be in advanced talks with global investors to raise $2.5 billion by the end of this month. This latest fundraising plan follows RRVL bagging $1 billion investment in August from Qatar Investment Authority (QIA) for a 0.99 per cent stake. QIA valued the country’s largest retailer at a pre-money equity valuation of nearly Rs 8.28 trillion.
 

According to a Reuters report, based on three sources, the plan to raise $2.5 billion is part of a combined $3.5 billion target the firm has set for itself. The QIA investment was part of this exercise.
 

 

RRVL was yet to respond to Business Standard’s e-mail query in this connection at the time of going to press.
 

At Reliance Industries’ annual general meeting held earlier this week, Mukesh Ambani, chairman and managing director of the conglomerate, told investors that several marquee global strategic and financial investors have shown strong interest in Reliance Retail.

“In less than three years, the valuation of Retail has almost doubled, notwithstanding the intervening Covid-19 pandemic. Based on this valuation, Reliance Retail, had it been listed, would have ranked among the top 4 companies in India and the top 10 retailers globally,” he told shareholders at the AGM.
 

He also said that as India grows from a $2,500 per capita economy to a $10,000 per capita economy, Reliance Retail will be its fastest-growing business in terms of revenue and Ebitda (earnings before interest, taxes, depreciation, and amortization).
 

In its previous fundraising round in 2020, the company raised a total of Rs 47,265 crore at a pre-equity valuation of Rs 4.21 trillion. It raised funds from investors, such as Silver Lake, Mubadala, General Atlantic, and KKR.
 

RRVL through its subsidiaries and affiliates operates an integrated omnichannel network of over 18,500 stores across various formats of retailing and digital commerce platforms across grocery, consumer, electronics, fashion & lifestyle, and pharma. It has also partnered with over 3 million merchants through its new-commerce initiative.
 

RRVL reported a consolidated turnover of Rs 260,364 crore ($ 31.7 billion) and a net profit of Rs 9,181 crore ($1.1 billion) in FY23.

At Reliance Industries’ AGM, Isha Ambani, director at RRVL, said: “We have invested over $10 billion in the past two years, focusing on building integration, growing in-house brands, and improving supply chain networks.”

She also said that it crossed a milestone of 1 billion transactions, up 42 per cent compared to last year. Its stores saw footfall of more than 780 million and the number of registered customers grew to nearly 250 million.