On Thursday, Reliance Industries Ltd (RIL) revealed that the sovereign Public Investment Fund (PIF) of Saudi Arabia is investing Rs 9,555 crore ($1.3 billion) to select a 2.04 percent stake in Reliance Retail Ventures Ltd (RRVL), becoming the biggest high-profile global fund to buy stakes in the largest retailer in India.
The Saudi company will take the number of international funds to plow money into RRVL to nine and its total foreign investment into Reliance Retail’s holding company to Rs 47,265 crore to collectively select 10.5 percent of the retailer’s stake.
The Saudi fund is making the largest investment in RRVL so far by announcing to invest Rs 9,555 crore to select a 2.04 percent stake, eclipsing Silver Lake’s September investment of Rs 7,500 crore when the US fund set the tone by acquiring a 1.75 percent stake in Reliance Retail.
In September, ET announced that RIL plans to raise around Rs 60,000-63,000 crore by selling a 15 percent stake in Reliance Retail, and the Mumbai conglomerate offered stakes to all companies that had pumped capital into Jio Platforms earlier this year when the RIL-owned telecom services provider attracted $20 billion FDI by selling 33 percent of the company’s stake to ten global funds.
RIL ‘s retail arm, which runs 12,000 brick-and – mortar stores and has grand ambitions for its “new trade” omni-channel play involving its physical shops, the recently launched JioMart e-commerce site and its plans to enlist millions of mom-and – pop stores, is now also purchasing the same range of funds.
Since September, Silver Lake, KKR, General Atlantic, Mubadala, Singapore’s GIC and TPG have already reported an investment of billions of dollars in Reliance Retail with global funds from the Middle East to the US.
On top of that, RIL is adding to its retail heft as it has agreed to acquire the country’s second largest Future Group retailer, which will bring in Rs 26,000 crore in additional revenues to build a Rs1.89 lakh crore ($26 billion) retail empire spanning around 14,000 brick-and – mortar stores and the combined company will be seven times greater in revenue than its closest competitor, Avenue Supermarts.