RIL-Silver Lake Deal - Angel Broking

Mr. Jyoti Roy - DVP - Equity Strategist, Angel Broking Ltd

"RIL has announced that Silver Lake will invest ₹ 7,500 crore in Reliance Retail Ventures Limited (RRVL), the retail arm of Reliance Industries Ltd. (RIL) for a 1.75% equity stake thus valuing the retail business at ₹ 4.21 lakh crore. The implied equity value for Reliance retail at ₹ 4.21 lakh crore is at the higher end of market expectations and is sentimentally positive for the stock. This investment by Silver Lake comes on the back of the company announcing the acquisition of the Retail, Wholesale, Logistics and Warehousing Business from the Future Group on a slump sale basis for a total consideration of ₹ 24,713 crore.

We also believe that the acquisition of future retail business by Reliance Industries Ltd. and investment by Silver Lake in RVVL are steps in the right direction. We expect the company to attract further investments in the retail business from other investors which will help consolidate its dominant position in the retail business. We remain positive on Reliance industries Ltd. and expect that the digital and the retail business will be the future growth drivers for the company. Further investments in the retail business and scaling up of Jio Mart business will be key triggers for the company in the near future. Listing of the digital and retail business over the next few years would also lead to significant value unlocking for shareholders in the long run. We continue to maintain our buy rating on reliance Industries with a target of ₹ 2,366."

Shares of RELIANCE INDUSTRIES LTD. was last trading in BSE at Rs.2107.05 as compared to the previous close of Rs. 2082.4. The total number of shares traded during the day was 481632 in over 20618 trades.

The stock hit an intraday high of Rs. 2120 and intraday low of 2080.9. The net turnover during the day was Rs. 1016007253.

Source : Equity Bulls

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