On Thursday, Reliance Industries Limited (RIL) announced that Saudi Arabia’s sovereign Public Investment Fund (PIF) is investing Rs. 9,555 crore ($1.3 billion) to pick 2.04% stakes in Reliance Retail Ventures Limited (RRVL). This marks the latest high-profile global fund to purchase a stake in India’s largest retailer.
Reliance founder Mukesh Ambani continues to add marquee backers. His fundraising has crossed $6.4 billion by now.
The Saudi organization plans to take the number of international funds to plunge capital into the RRVL to nine and their cumulative foreign investment into Reliance Retail’s holding company to Rs. 47, 265 crores to pick a combined 10.5% stake in the retailer.
With an investment of Rs. 9,555 crores to pick a 2.04% stake, this will be the largest investment so far in the RRVL. With this investment, they will be taking over Silver Lake’s investment of Rs. 7,500 crores in September. The US fund acquired a 1.75% stake in Reliance Retail.
According to reports, RIL planned to raise about Rs 60,000-63,000 crores by selling a 15% stake in Reliance Retail. They also decided to offered stakes to all the firms and companies that had injected capital into Jio Platforms. This happened when the RIL-owned telecom provider attracted a net $20 billion FDI by selling 33% of their stake in the company to ten global funds and four US tech giants. These include Google, Intel, Facebook, and Qualcomm.
Presently, the same set of funds are also buying into Reliance’s retail arm. RIL’s retail arm operates over 12,000 consumer stores. They are also planning a grand launch for its new commerce omnichannel play which includes their physical outlets, newly-launched JioMart e-commerce platform, and their plans to enlist millions of mom-and-pop stores.
Many global funds have invested billions into Reliance
A large number of global funds all over from the Middle East to the United States have already announced their intention to invest billions of dollars into Reliance Retail. These include Silver Lake, KKR, General Atlantic, Mudabala, Singapore’s GIC, and TPG.
Additionally, Reliance is also ready to acquire Future Group’s retail line. Future Group is the country’s second-largest retailer. Future Group retains some of the largest supermarket chains such as Big Bazaar, Food Bazaar, Brand Factory, etc. Reportedly, Future Group will carry in Rs. 26,000 crores in additional sales to generate Rs. 1.89 lakh crores ($26 billion) retail empire. Their retail empire will consist of about 14,000 conventional stores and the combined entity will be almost seven times bigger than their closest rivals in terms of revenues.
Recently, Amazon has also challenged the Reliance-Future Group deal. Amazon has claimed that the Reliance-Future deal is in complete violation of the deal Future has made with them. Amazon went ahead and sent a letter to the Securities and Exchange Board of India (SEBI), and the National Stock Exchange (NSE) requesting them to not approve the deal. On their part, Future Group has also maintained that they have not violated any agreements and are in compliance with the Amazon deal.