Mukesh Ambani's Reliance Retail in talks to raise $2.5 bn by end Sept

Mukesh Ambani’s, Reliance Retail Ventures, is in talks with global investors to raise around $2.5 bn by the end of September, Morgan Stanley being the key advisor.

Mukesh Ambani’s words

"Several marquee global strategic and financial investors have shown strong interest in Reliance Retail. I will update you about our progress with them in due course," Ambani said during the company's recent annual general meeting, without sharing further details.

Justification

• Reliance Retail, led by Isha Ambani with 18k+ outlets & a strong competitor of Amazon & Flipkart, is planning to raise $2.5 bn.

• According to the sources 

  •  This raising is part of the company’s target to raise $3.5 bn with $1 bn that came from Qatar Investment Authority (QIA) which was announced last month.

  • The company is in talks with at least two US-based investors, two sources said, while others told about the growing interest of existing foreign investors of Reliance.

• The company, valued at $52 billion this week, raised $5.71 billion by selling a 10.09% stake to investors including KKR, the Saudi Public Investment Fund, General Atlantic and the \United Arab Emirates' Mubadala in 2020. This valuation of its retail segment has doubled within 3 years.

• A/c to a source, the valuation of the company will be around $100 bn, the same at which QIA invested in the business. An infusion of capital worth $2.5 bn will be equivalent to a 2.5% stake in the company.

• For the FY 22-23, the company reported an impressive consolidated net profit of $1.11 bn (INR 91.81 bn) on revenue of INR 2.6 trillion.

• The company is constantly growing & expanding by targeting & acquiring small grocery & non-food brands with a vision to generate annual sales of $6 bn within 5 years, to challenge big market players like Unilever.