RIL's Shares Rise 3% After ADIA Investment

Reliance Industries’ witnesses a three percent gain in its shares on Wednesday. The three percent raise in shares elevates it to Rs.2, 287.50 on the BSE. The company’s shares inflated after it announced that the Abu Dhabi Investment Authority (ADIA) would invest Rs.5, 512.50 crores in its subsidiary Reliance Retail Ventures (RRVL) for a 1.2 percent stake. However, RIL’s stock had made a high record of Rs. 2,368.80 on September 16, 2020.

Abu Dhabi Investment Authority joins the list of leading global investors that include KKR, Silver Lake, General Atlantic, Mubadala, GIC, and TPG. With these investments, RRVL has raised Rs. 37,710 crore, and ADIA marks the seventh deal that has been announced by the Reliance Industries in just four weeks, stepping up the company’s stake-sale process that has seen marquee investors aid the firm.

RRVL’s subsidiary Reliance Retail is one of the country’s largest and rapidly growing businesses. This retail business has witnessed a high profit serving close to 640 million footfalls across its 12,000 stores all over the country

However, the Business Standard report states that RRVL is anticipated to divest only a small stake of 10-15 percent in its retail holding company, the proceeds of which will be used to fund its acquisitions that include the retail and wholesale business of Future Group and others. As part of its initial and ongoing fund-raising exercise, RRVL has already divested 8.48 percent stake to a bevy of private equity funds for Rs 37,710 crore.

Commenting on the investment, Hamad Shahwan Aldhaheri, Executive Director of the Private Equities Department, ADIA says, “Reliance Retail has rapidly established itself as one of the leading retail businesses in India and, by leveraging both its physical and digital supply chains, is strongly positioned for further growth. This investment is consistent with our strategy of investing in market leading businesses in Asia linked to the region’s consumption-driven growth and rapid technological advancement.”