Saudi fund invests $1.3b in India's Reliance Retail

It extends a string of large investments in Reliance Retail totaling around $6.4 billion and contemplates a pre-money equity valuation of $62.4 billion.

There has been significant interest from Middle Eastern sovereigns, with Abu Dhabi Investment Authority taking a 1.2% stake for $752 million and Mubadala Investment paying $847 million for a 1.4% interest, both in October. Previous investors also include GIC Private, TPG Capital, General Atlantic, KKR, and Silver Lake. 

Reliance Retail, a subsidiary of Indian conglomerate Reliance Industries, is rolling out a comprehensive consumer sector digitization agenda. The plan includes providing technology such as smart point-of-sale equipment, inventory management systems, and demand forecasting tools to the country’s estimated 25 million mom-and-pop retail operators.

The company is working in partnership with fellow Reliance Industries property Jio Platforms. Central to their plans is JioMart, an online grocery delivery service. JioMart’s offline store network has been built out mainly by signing up independent retailers as distributors and putting Jio branding on their storefronts. Orders under the program have cross 400,000 per day.

There is a natural dovetail with Reliance Retail, operator of India’s largest brick-and-mortar retail network with 12,000 stores nationwide and annual footfall of 640 million shoppers. Reliance Retail reported revenue of about $21.7 billion and a net profit of $726.4 million for the 12 months ending in March.

PIF described India’s retail sector as having meaningful growth potential, noting the sector accounted for more than 10% of GDP. The sovereign wealth fund took a 2.3% stake in Jio Platforms in June for INR113.6 billion. Jio Platforms also owns a portfolio of digital assets, including Reliance Jio, India's leading mobile carrier with more than 387.5 million subscribers.

“PIF is at the forefront of the economic transformation of the Kingdom of Saudi Arabia,” Mukesh Ambani, chairman of Reliance Industries, said in a statement. “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."

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• Topics
• South Asia
• Consumer
• Expansion
• Technology
• MENA
• India
• Public Investment Fund
• Reliance Industries