Silver Lake Picks 1.75% Stake In Reliance Retail For ₹7,500 Cr

Reliance Industries Ltd. now starts raising funds in its retail unit. Silver Lake marks the start of fundraising in retail by committing to invest ₹ 7,500 crore in Reliance Retail Ventures Ltd. (RRVL) – the company that bought Future Group’s assets. (Read: Deleveraged: Understanding the Reliance-Future Deal)

This investment by Silver Lake values RRVL – the holding company of retail unit – at a post-money equity value of ₹ 4.29 lakh crore. Silver Lake will hold a 1.75% stake in RRVL on a fully diluted basis.

This effectively values Reliance’s retail arm at a valuation of ₹ 4,21,500 crore which is roughly 30% of the valuation of the whole company.

A few days back, RRVL conducted a private placement where it issued 17.1 crore shares to RIL at ₹ 682.25. The total fund raised was close to ₹ 11,650 crore. This might have been done by the company to fund the Future Group acquisition and to set a precedence to value the retail arm.

Also, the new shares issued to Silver Lake is been done at ₹ 682.25, at the very same price.

We are yet to get clarity, whether Vanishree Commercials Pvt. Ltd. and Infotel Infocomm Enterprises Pvt. Ltd. are Reliance Promoter Group companies or Reliance Industries’ subsidiaries.

The structure of RRVL is similar to that of Jio Platforms Ltd. Like Jio Platforms is the holding company of mobile, broadband, and other tech platforms, RRVL is the holding company that houses RIL’s own retail unit, various other retail investments, and now also the Future Group assets.

Reliance Industries not only used to own equity shares in both these companies but also optionally convertible preference shares.

Jio Platforms after raising close to ₹ 1,52,500 crore said that it will retain only ₹ 22,980 crore, while the remaining would be transferred to the parent company – RIL. This will be transferred via redeeming the optionally convertible preference shares held by Reliance Industries in Jio Platforms.

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