Saudi Arabia’s PIF to invest $1.3 bn in Reliance Retail Ventures
Photo Credit: Reuters

The Public Investment Fund (PIF) of Saudi Arabia will invest Rs 9,555 crore ($1.3 billion) in Reliance Retail Ventures Ltd, the retail arm of billionaire Mukesh Ambani-led Reliance Industries Ltd.

The Gulf kingdom’s sovereign wealth fund will get a 2.04% stake in Reliance Retail Ventures, RIL said in a statement on Thursday.

The investment will strengthen PIF’s presence in India's “promising” retail market, RIL said.

This latest infusion values Reliance Retail at a pre-money equity value of Rs 4.58 trillion (around $62.4 billion).

PIF’s investment comes exactly a month after RIL announced that the Abu Dhabi Investment Authority (ADIA) would invest Rs 5,512.50 crore (around $751.35 million) for a 1.2% stake in its retail unit.

The ADIA investment came just three days after RIL said the retail unit would raise a total of Rs 7,350 crore (around $1 billion) from Singapore sovereign wealth fund GIC Pte Ltd and US-based private equity firm TPG.

PIF joins ADIA, TPG, GIC, Abu Dhabi sovereign fund Mubadala Investment Company and US-based PE firms Silver Lake Partners, KKR and General Atlantic in investing in Reliance Retail. Overall, Reliance Retail has raised Rs 47,265 crore from these PE and institutional investors in a two-month period.

“This transaction demonstrates PIF’s commitment to investing and partnering for the long term with innovative businesses around the world that lead and transform their sectors,” PIF governor His Excellency Yasir Al-Rumayyan said.

The spate of investments in Reliance Retail is in addition to the more than $20 billion that RIL mobilised from 13 investors for its digital services unit Jio Platforms Ltd earlier this year. The list included Google, Facebook and all but GIC of the seven investors in Reliance Retail.

RIL, India’s biggest company by market value, has been expanding its retail business as well as its telecom and digital services operations as it diversifies away from its core energy business.

Last month, the conglomerate agreed to acquire Future Group’s retail business in a multi-billion-dollar deal. It also recently bought a majority stake in online pharmacy Netmeds for Rs 620 crore.

However, the acquisition of the Future Group businesses hit a snag after the US-based e-commerce giant Inc sent a legal notice alleging that the Indian retailer breached the terms of its contract by signing a deal with RIL. Since then, a Singapore-based arbitration panel has put the deal on hold. Both Future and Reliance have said that they intend to complete the deal.

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