Reliance Retail to raise $1.3b from Saudi Arabia’s sovereign wealth fund

Reliance Retail Ventures Limited (RRVL), the retail arm of Indian conglomerate Reliance Industries Limited, announced that it will receive US$1.3 billion from Saudi Arabia’s sovereign wealth fund The Public Investment Fund (PIF) in exchange for a 2.04% stake in the company.

Mukesh Ambani’s Reliance Retail received US$1 billion from GIC, TPG. / Source: Flickr

This investment puts RRVL at a pre-money equity valuation of around US$62.4 billion and comes after PIF invested US$1.5 billion in Reliance Industries’ digital arm Jio Platforms in June.

According to RRVL, it serves close to 640 million footfalls at its 12,000 stores across the country. It aims to digitalize the Indian retail sector, which it says accounts for over 10% of the country’s GDP, through its “new commerce strategy.”

For the year ended March 31, 2020, the company reported a consolidated turnover of US$21.7 billion and a net profit of US$726.4 million.

The latest round is part of a stream of investments for RRVL: Last month, it received about US$1 billion from Singapore sovereign wealth fund GIC and private equity firm TPG Capital, as well as over US$750 million from the Abu Dhabi Investment Authority. It’s also backed by KKR, General Atlantic, and the Mubadala Investment Company, among others.

The company is expected to be a tough competitor against the global ecommerce players in India – Amazon and Walmart’s Flipkart – through its JioMart platform. It recently locked horns with Amazon over its acquisition of Future Group in August this year.