Saudi sovereign fund PIF invests Rs 9,555 cr for 2.04% stake in Reliance Retail Ventures Ltd
Mumbai/IBNS: Mukesh Ambani led Reliance Industries Ltd on Thursday announced that Saudi Arabia's sovereign Public Investment Fund (PIF) will invest Rs 9,555 crore (approximately $1.3 billion) for an equity stake of 2.04% in Reliance Retail Ventures Limited (RRVL).
With PIF's investment, a total of nine international funds have invested in RRVL, taking their cumulative investment to Rs 47,265 crore for a collective stake of 10.5 per cent.
This investment values RRVL at a pre-money equity value of Rs 4.587 lakh crore (approximately $62.4 billion).
"This investment will further strengthen PIF’s presence in India’s dynamic economy and promising retail market segment," the company said in a statement.
"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 companies globally and develop strong partnerships with leading groups in their respective markets," RIL added.
Earlier, PIF had acquired a 2.32% stake in Jio Platforms, the digital services subsidiary of Reliance Industries.
The Public Investment Fund is one of the largest and most impactful sovereign wealth funds in the world. It works alongside global strategic partners and renowned investment managers, and acts as the Kingdom of Saudi Arabia’s primary investment arm aiming toward generating long-term value for the Kingdom of Saudi Arabia in line with Vision 2030.
India’s retail sector is one of the largest in the world and accounts for over 10% of its gross domestic product (GDP) which presents meaningful growth potential.
Commenting on the deal, Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said, "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."
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.”
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, the company said.
Reliance Retail Ventures Limited is a subsidiary of Reliance Industries Limited, and holding company of all the retail companies under the RIL Group.
RRVL reported a consolidated turnover of Rs 162,936 crore ($ 21.7 billion) and net profit of Rs 5,448 crore ($ 726.4 million) for the year ended March 31, 2020.
Reliance Retail topped the list of ‘50 fastest-growing retailers globally between FY2013-2018’ in the Deloitte's Global Powers of Retailing 2020 index. Reliance Retail secured the 56th spot this year against the 94th rank the previous year and is the only Indian company to be featured in this list, the RIL statement said.