Having raised around $7.5 billion in two earlier rounds, Reliance Retail Ventures is prepping for another round of fund raising from institutional investors and this time it is looking at an ambitious valuation of upwards of $160 billion, sources said.

Last year when it raised over ₹15,000 crore from KKR, Qatar Investment Authority and Abu Dhabi Investment Authority, the valuation was a little over $100 billion, double the valuation at which it had raised over ₹47,000 crore in 2020.

Indications are this time around it would be raising a lower amount somewhere in the region of $1-2 billion, as management has clearly articulated that most of future capex will be through internal accruals.

Preparations for the fund raising are still at a preliminary stage and sources said that it is likely to take place toward the second half of the year. It is planning to tap some of the investors who had participated in the earlier rounds and new investors.

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An email sent to RIL for a comment did not elicit any response.

Valuation metrics

The confidence to seek higher valuation stems from the rapid growth of Reliance Retail. Its revenues have risen over 87 per cent between FY20 and FY24, while the EBITDA has more than doubled in that time. In FY24, its net profit rose about a fifth on year while revenue has risen over 15 per cent.

Major broker firms have valued the retail company in the range of $114-120 billion.

With a store footprint of over 18,000 spreads over 65 million square feet, it is by far the biggest retailer in the country. Analysts expect future growth of the company to be driven by higher sales per square feet from the stores added.

It has also cleaned up its balance sheet by reducing debt considerably and while operating cash flows saw a four-fold jump. Capex fell by a fifth to ₹36,800 crore and it is expected to remain low in future years as investment intensity reduces.

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