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Reliance Retail asset monetization picks up pace

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Reliance. (File Photo: IANS)

Retail asset monetization is picking up pace as private equity firm KKR announced a Rs 55.5 billion ($ 0.75 billion) investment in Reliance Retail for a 1.28 per cent stake implying a pre-money equity value of $57 billion.

According to a report by Morgan Stanley, the valuation is in line with the last transaction valuation announced with Silverlake and compares to its retail base case valuation of $45 billion.

“At these valuations, it would add 6 per cent to Morgan Stanley’s base case NAV for RIL. KKR earlier invested $1.51 billion for 2.3 per cent of Reliance Digital platforms. RIL has sold a 3 per cent stake in RIL retail till date for $1.75 billion,” the report said.

“We see capital allocation,execution and de-gearing as key to the next leg of stock outperformance,” the report said.

“With industry consolidation pickingup pace in telecom, retail,and global refining, we expect RIL to emerge stronger post-Covid-19 and margins to surprise as pricing power rises,” it added.

Reliance Industries Limited (RIL) and Reliance Retail Ventures Limited (RRVL) announced today that global investment firm KKR will invest Rs 5,550 crore into RRVL, a subsidiary of Reliance Industries. This investment values Reliance Retail at a pre-money equity value of Rs 4.21 lakh crore. KKR’s investment will translate into a 1.28 per cent equity stake in RRVL on a fully diluted basis.

This marks the second investment by KKR in a subsidiary of Reliance Industries, following a Rs 11,367 crore investment in Jio Platforms announced earlier this year.

Reliance Retail Limited, a subsidiary of RRVL, operates India’s largest, fastest growing and most profitable retail business serving close to 640 million footfalls across its 12,000 stores nationwide.

Business

Zomato shares decline 9%, market cap falls below 1L cr

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Shares of online food aggregator Zomato declined 9 per cent intraday on Friday.

Analysts are linking the decline with unsupportive valuations. Over the past one-month period, Zomato shares fell nearly 18 per cent.

Listed in July 2021, Zomato shares are, however, up more than 50 per cent from its IPO issue price of Rs 76. On Friday’s closing, it was at Rs 114 per share.

“The costs have escalated due to the tax imposed on the aggregator, along with the fact that the lockdown is also not currently happening, which also appears to be a weakness,” said Ravi Singhal, Vice Chairman at GCL Securities.

With Friday’s losses, the company’s market capitalisation fell below the 1 lakh crore-mark, NSE data showed.

According to Ravi Singh, Vice President and Head of Research, Share India Securities: “The technical setup in Zomato stock is in bearish formation on intraday and daily which may drag the stock up to Rs 112-110 levels in the near term.

“The valuations of the company are also not supporting the growth. Zomato is facing tough competition from Swiggy in many ways, mainly having a thinner Metro restaurant network and density versus Swiggy. We recommend investors to maintain the sell position in the stock.”

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Decline in equities continue for 4th straight sessions

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The 30-scrip Sensitive Index (Sensex) and broader 50-scrip Nifty on the National Stock Exchange (NSE) extended their losses from the previous three consecutive sessions and declined on Friday.

At 10.25 a.m., Sensex traded at 58,593 points, down 0.9 per cent from the previous close of 59,464 points. It opened at 59,039 points.

Nifty traded at 17,599 points, down 0.9 per cent from the previous close of 17,757 points. It opened at 17,613 points.

Bajaj Finserv, Tech Mahindra, Coal India, Adani Ports, Bharti Airtel were some of the top losers, NSE data showed.

Top gainers during the early trade were Hindustan Unilever, Tata Consumers, Bajaj Auto, Hero MotoCorp, and Power Grid Corporation.

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Business

Decline in equities continue for 4th straight sessions

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The 30-scrip Sensitive Index (Sensex) and broader 50-scrip Nifty on the National Stock Exchange (NSE) extended their losses from the previous three consecutive sessions and declined on Friday.

At 10.25 a.m., Sensex traded at 58,593 points, down 0.9 per cent from the previous close of 59,464 points. It opened at 59,039 points.

Nifty traded at 17,599 points, down 0.9 per cent from the previous close of 17,757 points. It opened at 17,613 points.

Bajaj Finserv, Tech Mahindra, Coal India, Adani Ports, Bharti Airtel were some of the top losers, NSE data showed.

Top gainers during the early trade were Hindustan Unilever, Tata Consumers, Bajaj Auto, Hero MotoCorp, and Power Grid Corporation.

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