Saudi PIF invests Rs 9,555 crore in Reliance Retail

Reliance Industries (RIL) on Thursday said that Saudi Arabia’s Public Investment Fund (PIF) will invest Rs 9,555 crore ($1.3 billion) in its subsidiary, Reliance Retail Ventures (RRVL), for a 2.04% stake. The stake sale now values RRVL at a higher valuation of Rs 4.587 lakh crore, compared to Rs 4.285 lakh crore so far. The investment in Reliance Retail by PIF comes shortly after it invested Rs 11,367 crore in Jio Platforms for a 2.32% stake.

The investment in RRVL by PIF is the eighth investment in RIL’s retail arm within two months. Silver Lake, KKR, General Atlantic, Mubadala, GIC, TPG and ADIA have been the other investors so far.

Thus, within two months, the retail firm has sold a 10.52% stake raising a total fund of nearly Rs 47,264.6 crore.

Commenting on the transaction with PIF, Mukesh Ambani, chairman and managing director, Reliance Industries, said, “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.”

Yasir Al-Rumayyan, governor of PIF, said, “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”.

Reliance Retail, a subsidiary of RRVL, sees close to 640 million footfalls at its around 12,000 stores across the country. “Reliance Retail’s vision is to galvanise the Indian retail sector through its new commerce strategy, serving millions of customers by empowering millions of micro, small and medium enterprises (MSMEs),” the company said in a statement.

Even though Reliance Retail is ahead of its peers when it comes to digitisation of its services, it will need to make large investments to consolidate the backend and digitise operations to take on Amazon and Flipkart.

Reliance Retail has already marked its entry into the e-commerce business with the launch of JioMart in tie-up with Facebook’s popular platform, WhatsApp, to take on the likes Amazon and Flipkart. JioMart has already been launched in around 200 cities.

Reliance Retail is also set to acquire Future Group’s retail business, which has a portfolio of strong retail assets across grocery, fashion and lifestyle. The transaction is yet to close, and e-commerce major Amazon has raised objection to the transaction. Amazon has got an interim injunction from Singapore International Arbitration Centre (SIAC), putting the deal on hold.

However, both Future and Reliance have said that the proposed transaction will proceed without any delay. On Tuesday, Future also filed a caveat before the Delhi High Court requesting it to be heard if any plea is filed by Amazon over the Rs 24,713-crore deal with RIL.

Earlier, Jio Platforms, another arm of RIL, had attracted investments from 14 global investment firms totalling `1,52,055.45 crore for a 32.97% stake.