Abu Dhabi Investment Authority (ADIA) and KKR have invested in Reliance Retail Ventures's warehousing assets in a transaction worth Rs 12,864 crore (USD 1.5 billion). The amount will be split equally in this company.

The operations and maintenance (O&M) of the assets will be undertaken by Reliance Projects & Property Management Services (RPPMSL), a 100 percent subsidiary of parent Reliance Industries (RIL). Both KKR and ADIA are investors in RRVL and Jio Platforms, which runs RIL’s digital and telecom businesses.

The purchase was funded by way of senior debt of Rs 7,075 crore, subordinated non-convertible debentures (NCDs) of Rs 5,275 crore and the remainder through equity infusion. This is apart from the infrastructure investment trust (InvIT) that Reliance Retail Ventures (RRVL) set up last year to house about half its retail warehousing assets.

The warehouses are parked in a special purpose vehicle (SPV), Intelligent Supply Chain Infrastructure Management (ISCIMPL). In March, RRVL had transferred 11-12 million sq. ft. of warehousing assets to Reliance Logistics and Warehouse Holdings (RLWH), which was incorporated in December 2022. RRVL had transferred warehousing assets worth Rs 5,150 crore in 2023 to an InvIT called Intelligent Supply Chain Infrastructure Trust.

For the larger spaces, with a similar aggregate area of around 12.77 million sq. ft., ISCIMPL has executed a warehouse use agreement (WUA) with anchor tenant RRVL for 30 years. There is a possibility that warehouse assets could be given out to new customers to generate additional revenue and cash flows. Relaince Retail (RRL) houses the core businesses, including Reliance Digital, Jio Mart and19,000 brick-and-mortar stores, having a total of 79.1 million sq. ft. retail area as of FY24.