You are here: Home » Companies » News
Business Standard

Saudi Public Investment Fund to invest Rs 9,555 crore in Reliance Retail

This investment values Reliance Retail Ventures Limited (RRVL) at a pre-money equity value of Rs 4.587 trillion

Topics
Reliance Retail

Press Trust of India  |  New Delhi 

reliance trends, reliance retail, ril
Reliance Retail Limited, a subsidiary of RRVL, operates India's largest, fast-growing retail business serving close to 640 million footfalls at its 12,000 stores across the country

Billionaire Mukesh Ambani-run Reliance Industries Ltd's retail arm on Thursday raised Rs 9,555 crore from Public Investment Fund (PIF) of Saudi Arabia, taking total fundraise in the last two months to Rs 47,265 crore.

PIF will take a 2.04 per cent stake in Ventures Ltd (RRVL), the Indian firm said in a statement.

The investment values RRVL, the retail arm of Reliance Industries Ltd, at a pre-money equity value of Rs 4.587 trillion.

This is second investment by the Saudi Arabian sovereign wealth fund in an Ambani firm. It had previously picked up 2.32 per cent stake in Jio Platforms, the digital and telecom arm of Reliance, for Rs 11,367 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 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 per cent of its gross domestic product (GDP) which presents meaningful growth potential.

Ambani, Chairman and Managing Director of Reliance Industries, said: "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.

"I welcome PIF as a valued partner in 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: "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." "This investment further demonstrates PIF's commitment to generating returns for the Saudi people and driving the economic diversification of Saudi Arabia," he said.

Limited, a subsidiary of RRVL, operates India's largest, fast-growing retail business serving close to 640 million footfalls at its 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 Indian firm said.

RRVL had previously raised Rs 37,710 crore from leading global investors including Silver Lake, KKR, General Atlantic, Mubadala, GIC, TPG and Abu Dhabi Investment Authority (ADIA).

The investments equip Reliance Retail with funds to compete in both offline and online formats. The investments come as the country's retail sector prepares for the festival season and would help Reliance to launch an assault on rivals such as Walmart-owned e-commerce company Flipkart and Amazon.

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.

It operates about 12,000 stores in nearly 7,000 towns, across core categories of grocery, consumer electronics and apparel.

The new funding comes weeks after Reliance acquired the retail, wholesale, logistics and warehouse business of Future Group for an enterprise value of 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 Future's unlisted entity.

Earlier Reliance raised an unprecedented Rs 1.52 trillion for Jio Platforms, the group's telecom and digital services company, from investors such as Facebook, Intel and Google.

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.

Retailers are expecting to pick up in sales during the current festive season.

Reliance Retail in May this year launched JioMart, an e-commerce venture, to connect mom-and-pop stores, called Kirana, with consumers. In July, JioMart was serving 4,00,000 orders a day and is currently operational in 200 cities.

Reliance Industries has sold a 10.52 per cent stake in the retail unit since September 9 for a total of Rs 47,265 crore.

With this, Jio Platforms and Reliance Retail account for over Rs 9 trillion of Reliance Industries Ltd's valuation.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, November 05 2020. 16:32 IST
RECOMMENDED FOR YOU
.