Mubadala-Reliance Retail deal: Abu Dhabi state fund to invest Rs 6,247.5 crore for 1.4% of RIL unit

Abu Dhabi state fund Mubadala Investment Co will invest Rs 6,247.5 crore to secure 1.4 percent in the retail unit of Reliance Industries (RIL), joining a posse of global investors scrambling to buy stakes in the Indian company.

This latest investment —  with Silver Lake's co-investors and General Atlantic, the fifth in three weeks — values Reliance Retail at a pre-money equity value of Rs 4.285 lakh crore, RIL said in an exchange filing.

On September 30, RIL said the co-investors of private equity giant Silver Lake will invest an additional Rs 1,875 crore in Ventures (RRVL), taking their combined investment in the company to Rs 9,375 crore in exchange for a 2.13 percent stake.

Investor interest in Reliance Retail, a subsidiary of RRVL, has been amplifying in the past few weeks. Besides the Silver Lake investments, India’s biggest brick-and-mortar retail business has also collected Rs 5,550 crore from US buyout firm KKR & Co and Rs 3,675 crore from private equity firm General Atlantic.

Reliance Retail operates India's largest, fastest growing and most profitable retail business serving close to 640 million footfalls across its nearly 12,000 stores nationwide.

In June, Mubadala invested Rs 9,093 crore in Jio Platforms, the digital services division of RIL. Several of the overseas investors in Jio have now turned their attention to Reliance Retail.

Mubadala is billed as the second-biggest state investor after Abu Dhabi Investment Authority. It has more than 50 businesses and investments in more than 50 countries.

Mubadala typically invests in enterprises that create lasting value and positive economic and social impact in communities at home and overseas, according to its website. Its portfolio companies are spread in sectors such as aerospace, agri business, information and communication technology (ICT), semiconductors, metals and mining, pharmaceutical and medical technology, renewable energy and utilities. It also manages diverse financial holdings.

The transaction is subject to regulatory and other customary approvals.