New Delhi, Nov 5, 2020: India’s richest man Mukesh Ambani led Reliance Retail raises $1.3 billion (Rs 9,555 crore) from the Saudi Arab based Public Investment Fund (PIF).
PIF will acquire a 2.04 percent stake in Reliance Retail. This is the second investment by the Saudi Arabian sovereign wealth fund in an Ambani firm. Earlier It had picked up a 2.32 percent stake in Jio Platforms for $1.5 billion (Rs 11,367 crore).
The investment values RRVL, the retail arm of Reliance Industries Ltd, at a pre-money equity value of $62 billion (Rs 4.587 lakh crore).
“This investment will further strengthen PIF’s presence in India’s dynamic economy and promising retail market segment,” the statement said.
“The transaction is in line with PIF’s strategy as a leading global investor with a proven track-record of investing in innovative and transformative companies globally and develop strong partnerships with leading groups in their respective markets,” it added.
India’s retail sector is one of the largest in the world and accounts for over 10 percent of its gross domestic product (GDP) which presents meaningful growth potential.
Reliance Retail which operates India’s largest, fast-growing retail business serving close to 3.4 million customers per week at its 12,000 stores in nearly 7,000 towns across the country. The company has now raised over 6.4 billion since September this year.
The investments equip Reliance Retail with funds to compete in both offline and online formats.
Reliance Retail Ltd operates India’s most profitable retail business spanning supermarkets, consumer electronics chain stores, cash and carry wholesale business, fast-fashion outlets and online grocery store JioMart.
The new funding comes weeks after Reliance acquired the retail, wholesale, logistics, and warehouse business of Future Group for an enterprise value of $3.4 billion (Rs 24,173 crore) to consolidate its dominant market positioning in offline retail.
The deal, however, is being challenged by US e-commerce giant Amazon, which had taken a stake in the Future’s unlisted entity.
Earlier Reliance raised an unprecedented $20 billion for Jio Platforms, the group’s telecom and digital services company, from investors such as Facebook, Intel Google etc.
The oil-telecom-to-retail conglomerate intends to divest minority stakes in its digital and retail businesses, and hold initial public offerings for each within five years.
With this, Jio Platforms and Reliance Retail account for over $120 billion of Reliance Industries Ltd’s valuation.