RIL Offers Stake In Reliance Retail To Jio Platforms' Strategic Investors

After a record back to back investment from global strategic investors in Reliance Jio, the leading Indian conglomerate RIL is eyeing interest in its retail venture RRVL too from these 13 companies. This is as per two people with knowledge on the development.

RIL Offers Stake In Reliance Retail To Jio Platforms' Strategic Investors

All these investors including the likes of Facebook, Google, KKR, Silver Lake and TPG helped RIL garner a sum of huge Rs. 1.52 trillion by buying a stake of 33% in Jio. The retail business of RIL may thus be able to take the next leap and also pare its debt burden as FDI in multi-brand retailing is not allowed in the country.

"Reliance Retail may follow the Jio Platforms model, onboarding multiple investors by selling stakes in the firm," said a senior retail consultant, aware of the talks.
Arvind Singhal, chairman at Technopak Advisors, said: "Reliance Retail cannot partner with a retailer for the deal due to FDI restrictions. So, it can only look for a financial or strategic investor like it did for Jio Platforms."

On the same lines, last month, the company's MD and Chairman Mukesh Ambani said the retail venture of the company will onboard global partners over the next few quarters.

According to RIL's annual report, the company's gross debt at the end of the last fiscal stood at Rs. 3.36 trillion. This included Rs.4,618 crore of Reliance Retail .Responding to emailed queries, a spokesperson for Reliance Retail Ltd said, "As a policy, we do not comment on media speculation and rumours.""Our company evaluates various opportunities on an ongoing basis," the spokesperson said, adding that the company will make disclosures, whenever necessary, in compliance with its listing obligations.

Reports of Silver Lake eyeing 10% stake in Reliance Retail Ltd (RRL) with an investment of $1 billion at at an enterprise valuation of $57 billion are also doing the rounds.

On JP Morgan said though a stake sale will add balance sheet flexibility, the key will be whether RRL is able to attract strategic investors (global retailers and e-commerce companies that are currently competing with RRL in India), that could drive re-rating on expectations of reduced competition for the company. It is as analyst seem divided on Reliance Retail's valuation.

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