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Reliance Retail asset monetization picks up pace
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SME Times News Bureau | 23 Sep, 2020
Retail asset monetization is picking up pace as private equity firm KKR
announced a Rs 55.5 billion ($ 0.75 billion) investment in Reliance
Retail for a 1.28 per cent stake implying a pre-money equity value of
$57 billion.
According to a report by Morgan Stanley, the
valuation is in line with the last transaction valuation announced with
Silverlake and compares to its retail base case valuation of $45
billion.
"At these valuations, it would add 6 per cent to Morgan
Stanley's base case NAV for RIL. KKR earlier invested $1.51 billion for
2.3 per cent of Reliance Digital platforms. RIL has sold a 3 per cent
stake in RIL retail till date for $1.75 billion," the report said.
"We see capital allocation,execution and de-gearing as key to the next leg of stock outperformance," the report said.
"With
industry consolidation pickingup pace in telecom, retail,and global
refining, we expect RIL to emerge stronger post-Covid-19 and margins to
surprise as pricing power rises," it added.
Reliance Industries
Limited (RIL) and Reliance Retail Ventures Limited (RRVL) announced
today that global investment firm KKR will invest Rs 5,550 crore into
RRVL, a subsidiary of Reliance Industries. This investment values
Reliance Retail at a pre-money equity value of Rs 4.21 lakh crore. KKR's
investment will translate into a 1.28 per cent equity stake in RRVL on a
fully diluted basis.
This marks the second investment by KKR in a
subsidiary of Reliance Industries, following a Rs 11,367 crore
investment in Jio Platforms announced earlier this year.
Reliance
Retail Limited, a subsidiary of RRVL, operates India's largest, fastest
growing and most profitable retail business serving close to 640
million footfalls across its 12,000 stores nationwide.
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