Reliance Retail's IPO prep: RIL could sell 8-10% stake
What's the story
Reliance Industries plans to sell an additional 8-10% stake in Reliance Retail Ventures Limited (RRVL) to fund expansion, repay debt, and prepare for its stock market debut. This move is crucial for the proposed IPO, as it will help make the IPO size more manageable and ensure its success. The stake sale will likely occur in tranches over 12-15 months, the Economic Times reported.
Details
Reliance wants to make the IPO manageable
According to the Securities and Exchange Board of India's (SEBI) listing rules, a company's public shareholding must be at least 25%, including shares held by financial investors. RRVL's current valuation stands at Rs. 8.25 lakh crore, and the company believes that diluting an additional 7-10% equity will make the IPO size more manageable. In 2020, Reliance Retail had diluted a 10.1% stake to various investors and sovereign wealth funds, including KKR, General Atlantic, and Abu Dhabi Investment Authority.
Insights
Qatar Investment Authority invested nearly $1bn in Reliance Retail
This stake sale plan comes after Qatar Investment Authority announced its investment of Rs. 8,278 crore ($997 million) in the retail chain for a 1% stake. It is the single largest investment by the sovereign wealth fund of Qatar in India. The investment is expected to further strengthen RRVL's position in the Indian retail market and contribute to its growth and expansion plans.