KKR Reliance Retail Deal: KKR to invest Rs 5,550 crore in Reliance Retail Ventures Limited. Reliance Retail, a subsidiary of global investment firm KKR Reliance Industries, will invest Rs 5,550 crore.
Reliance Industries Limited and Reliance Retail Ventures Limited announced it on Wednesday. With this investment, KKR will get a 1.28% equity stake in RRVL. This is the second deal by Reliance Retail in two weeks.
Earlier this month, private equity Silver Lake Partners said it would invest Rs 7,500 crore in Reliance Retail for a 1.75% stake. The deal valued Reliance Retail’s pre-money equity at Rs 4.21 lakh crore.
This is the second investment by KKR in a Reliance Industries subsidiary after investing Rs 11,367 crore in Jio Platforms earlier this year. KKR, established in 1976, has assets of $ 222 billion as of June 30, 2020.
Reliance Retail claims that about 64 crore buyers come annually to more than 12 thousand stores spread across the country. It is India’s largest and fastest-growing retail business.
Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said that I am happy to welcome KKR as an investor in Reliance Retail Ventures. He said that under this deal we are continuously moving forward to strengthen our Indian retail ecosystem.
Ambani said that KKR has a good track record of being a valuable partner in the industry space and has been committed to India for many years. Mukesh Ambani said We are ready to take advantage of KKR’s global platform, industry knowledge, and operational experts in our digital services and retail business.
Reliance Retail has started digitizing small and unorganized merchants as part of its new commerce strategy. The company aims to connect 2 crore merchants to this network.
To promote digital transactions, the government needs to limit the merchant discount rate (MDR) on all types of debit and prepaid cards to 0.6 percent of the transaction value.
A study conducted by the Indian Institute of Technology, Bombay suggested that the upper limit should be fixed at Rs 150 for MDR at a fixed rate of 0.6 percent.
The study said, “To encourage digital payments, for small and medium merchants accepting POS-based payments, where the annual turnover is up to Rs 2 crore, the MDR limit for transactions up to Rs 2,000 may be increased to 0.25 percent. , While for transactions above 2,000, this limit can be up to 0.6 percent.