Saudi PIF to invest $1.3 billion in Reliance Retail for 2.04% stake

NEW DELHI: Reliance Industries Ltd (RIL) announced on Thursday that Saudi Arabia’s sovereign Public Investment Fund (PIF) is investing Rs 9,555 crore ($1.3 billion) to pick 2.04% stake in Reliance Retail Ventures Ltd (RRVL), becoming the latest high-profile global fund to purchase stake in India’s largest retailer.

The Saudi company will take the number of international funds to plough capital into RRVL to nine and their cumulative foreign investment into the holding company of Reliance Retail to Rs 47,265 crore to collectively pick 10.5% stake in the retailer.

By announcing to invest Rs 9,555 crore to pick 2.04% stake, the Saudi fund is making the largest investment so far in RRVL, eclipsing Silver Lake’s September investment of Rs 7,500 crore when the US fund set the tone by acquiring a 1.75% stake in Reliance Retail.

ET had reported in September that RIL is planning to raise about Rs 60,000-63,000 crore by selling a 15% stake in Reliance Retail and the Mumbai conglomerate has offered stakes to all the firms that had earlier this year injected capital into Jio Platforms when the RIL-owned telecom services provider attracted $20 billion FDI by selling 33% stake in the company to ten global funds and four US tech giants of Google, Facebook, Intel and Qualcomm.

Now the same set of funds are also buying into RIL’s retail arm that operates 12,000 brick-and-mortar stores and has grand plans for its “new commerce” omni-channel play involving its physical outlets, newly-launched JioMart e-commerce platform and its plans to enlist millions of mom-and-pop stores.


Since September, a bevy of global funds from Middle East to the US including Silver Lake, KKR, General Atlantic, Mubadala, Singapore’s GIC and TPG have already announced investing billions of dollars into Reliance Retail.

On top of that, RIL is adding to its retail heft as it has agreed to acquire the country’s second largest retailer Future Group that will brings in Rs 26,000 crore in additional sales to create a Rs1.89 lakh crore ($26 billion) retail empire spanning about 14,000 brick-and-mortar stores and the combine entity will be seven times bigger in terms of revenues than its nearest rival Avenue Supermarts, that runs D'Mart.

However, that acquisition is currently under clearance from the Competition Commission of India even as the US-based e-commerce giant Amazon has challenged the Future Group’s sell-off plans.

Last month, Amazon had approached the Singapore International Arbitration Centre (SIAC) arguing the sale of Future Group’s assets to Reliance Retail was in breach of a previous investment agreement between Amazon and a Future Group promoter company that the US giants claims would give Amazon the first right of refusal to purchase the entire stake of Future Coupons that owns about 7.3% of the Future Retail.