Saudi Arabia's Sovereign Fund will buy a stake worth about Rs 9,555 crore ($1.3 billion) in Reliance Industries Ltd.'s retail business as Asia's richest man continues to raise funds to bolster dominance of his consumer operations.
The Public Investment Fund will pick up a 2.04% stake in Reliance Retail Ventures Ltd., the holding arm for Mukesh Ambani's retail business, according to media statements issued by RIL and PIF on Thursday. The deal pegs the pre-investment equity valuation of Reliance Retail at Rs 4.58 lakh crore.
“India's retail sector is one of the largest in the world and accounts for over 10% of its gross domestic product, which presents meaningful growth potential,” RIL said in the release.
According to Yasir Al-Rumayyan, governor of PIF, this “transaction demonstrates PIF's commitment to investing and partnering for long term with innovative businesses around the world that lead and transform their sectors”.
PIF joins other global investors that have invested in Ambani's retail venture. That includes Abu Dhabi Investment Authority, Silver Lake, KKR & Co., General Atlantic, Mubadala Investment Co., GIC Pte Ltd. and TPG.
Ambani is replicating funding blitz for the retail unit after selling stakes in Jio Platforms as investors, including Facebook Inc. and Google LLP, bet on his efforts to build a technology giant that offers data, content and commerce. PIF, too, had invested $1.5 billion for a 2.32% stake in the digital services subsidiary of RIL.
Reliance Retail has a total of 12,000 stores across consumer electronics, grocery and general merchandise and fashion and lifestyle. It reported a consolidated turnover of nearly Rs 1.63 lakh crore ($21.7 billion) and net profit of Rs 5,448 crore ($726.4 million) for the year ended March. Acquisition of Future Group's retail and logistics business for Rs 27,513 crore will add 1,736 Big Bazaar and other stores.
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