Reliance Retail raises ₹9,555 crore from Saudi PIF

The Saudi wealth fund becomes the largest investor in Reliance Retail Ventures Ltd.

Reliance announced on Thursday that they had gained Saudi Arabia’s Public Investment Fund (PIF) as their new investors for the retail arm of Reliance Industries Ltd. PIF picked up 2.04 per cent stake at ₹9,555 crores in the Reliance Retail Ventures Ltd. (RRVL), joining the group of high-profile global investors (that include names like Facebook and Google) who have invested in Reliance’s Ventures.

PIF has already maintained its position as one of the largest global sovereign wealth funds in the world, as well as the primary investment arm for the Kingdom of Saudi Arabia.

“This investment will further strengthen PIF’s presence in India’s dynamic economy and promising retail market segment,” Reliance said in a statement.

India has one of the largest retail markets in the world, accounting for its 10 per cent of gross domestic product (GDP), which the company says projects meaningful growth.

The investment holds Reliance Retail Ventures at a pre-money equity value of ₹ 4.587 lakh crore. After the deal, the cumulative foreign investment (FDI) in the Reliance Retail would value at ₹47,265 crores. The Saudi sovereign wealth fund will make the largest investment in the business, taking RRVL’s sold stakes to 10.09 per cent.

“We at Reliance have a long-standing relationship with the Kingdom of Saudi Arabia. PIF is at the forefront of the economic transformation of the Kingdom of Saudi Arabia,” said the Chairman and Managing Director of Reliance Industries, Mukesh Ambani in the statement.

PIF has previously claimed 2.32 per cent stake at Jio Platforms, the digital technology subsidiary of Reliance Industries for ₹11,367 crores.

“I welcome PIF as a valued partner in Reliance Retail and look forward to their sustained  support and guidance as we continue our ambitious journey to transform India’s retail  sector for enriching the lives of 1.3 billion Indians and millions of small merchants,” said Ambani.

Reliance Retail Ventures has been planning to sell 15 per cent of their stakes and raise about ₹60,000 crores. Previous reports stated that Reliance had invited all the firms that had acquired stakes in Jio Platforms to inject capital into their retail subsidiary.

The investment contributes to PIF’s strategy and mandate to invest in leading transformative businesses that generate long-term commercial returns, as the official statement reads. The Saudi company has an impressive track record of establishing a global partnership with leading groups in various market segments.

His Excellency Yasir Al-Rumayyan, Governor of PIF, also expressed his thoughts on the acquisition saying, “We are pleased to be  furthering our trusted partnership with Reliance Industries, the leading player in some of  India’s most exciting sectors. 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.”

The PIF comprises of six local and global investment pools that operate with the objective to invest in international opportunities that can further alleviate and develop Saudi Arabia’s economy.

“This investment further demonstrates PIF’s commitment to generating returns for the  Saudi people and driving the economic diversification of Saudi Arabia,” he said in the statement.

The Reliance Retail Ventures, being the largest fast-growing retail business, operates at 12,000 brick and mortar stores. The company’s business is to galvanise the Indian retail store through its new commerce strategy to serve millions of customers by empowering numerous micro, small and medium enterprises (MSMEs).

Reliance Industries is known to attract global investment to various subsidiaries. For the past few months, a slew of investors from all around the world has flocked around the company, looking to invest in its stake. Some of them are Singapore’s GIC, Silver Lake, KKR, TPG Abu Dhabi Investment Authority, Mubadala Investment Co. And General Atlantic for Reliance Retail. Previously, Silver Lake held the highest share in Reliance Retail Ventures with an investment for ₹7,500 crores for 1.75 per cent of the stake.

Some of these investors have also contributed to raising over one lakh crore for 33 percent of Jio Platform’s stake, including renowned tech giants like Facebook, Google, Intel and Qualcomm.

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