Reliance Retail Ventures received an investment of Rs 7,500 crores from Silver Lake in what could be the beginning of more inflows into the retail venture of Reliance Industries.
According to a report by Motilal Oswal at an estimated net debt of Rs 100 billion, the enterprise value stands at Rs 4.31 trillion.
"This implies 1.75% stake at post-money equity value of Rs 4.29 trillion. We understand this is fresh capital infusion in the company unlike the stake sale done in Jio Platforms," Motilal Oswal has said.
The Reliance stock has been on fire and has now jumped almost 250 per cent since different investors began picking stake in Jio Platforms. If investors now flock to Reliance Retail Ventures, the stock could continue to outperform the markets by a distance.
Solid valuation for Reliance Retail
According to Motilal Oswal report, Silver Lake has already invested INR 101b in RIL (it has picked up 2.08% stake in Jio Platforms).
"The current deal strengthens our conviction in RIL's retail business valuations. With combined AUM of more than dollar 60 billion focused on global tech-enabled opportunities, Silver Lake is a leader in large-scale technology investing. It boasts of other investments such as Airbnb, Alibaba, Alphabet's Verily and Waymo units, Dell Technologies and Twitter, etc. RRVL could leverage Silver Lake's digital experience to expand its JioMart business - its e-commerce venture," Motilal Oswal has said.