Reliance Industries (RIL) on Thursday said Saudi Arabia’s sovereign wealth fund Public Investment Fund (PIF) will invest Rs 9,555 crore, or roughly $1.3 billion, for a 2.04 percent stake in its retail unit Reliance Retail Ventures Limited (RRVL).
Reliance Retail Venture's subsidiary Reliance Retail operates India's largest retail business serving close to 640 million footfalls across its 12,000-odd stores nationwide in 7000 cities.
This is the eighth investment by marquee global investors in Reliance Retail Ventures in less than two months and values RRVL at a pre-money equity value of Rs 4.587 lakh crore (around $62.4 billion). Including the PIF deal, RIL has so far sold a little over 10 percent in RRVL for a combined Rs 47,265 crore.
The latest fund raising is part of RIL’s strategy to expand its retail business and take on rivals such as Amazon India and Walmart-owned Flipkart in India’s huge market.
Investors such as Singapore's sovereign wealth fund GIC, global alternative asset firm TPG Abu Dhabi Investment Authority, Mubadala Investment Co, General Atlantic, KKR and Silver Lake (in two tranches) have already purchased stakes in the company.
This is PIF's second investment in a Reliance group company, having earlier picked up a 2.32 percent stake in Jio Platforms, the digital services subsidiary of RIL.
Mukesh 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 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."
Founded in 1971, PIF invests funds on behalf of the Government of Saudi Arabia.