Saudi Arabia’s PIF acquires 2.04% stake in Ambani-owned Reliance Retail

By Rahul Vaimal, Associate Editor
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The Public Investment Fund (PIF) of Saudi Arabia, one of the largest sovereign wealth funds in the world, which invested $1.5 billion this year in the telecom venture of Mukesh Ambani Jio Platforms and more than half a billion dollars in his fiber-optics business, has returned to invest in yet another empire created by the richest man in India.

For a 2.04 percent equity stake in the largest retail chain in India, the sovereign wealth fund is investing $1.3 billion in Reliance Retail. The latest investment values Reliance Retail, which was formed in 2006, at $62.4 billion, said an official statement from the company.

Since September this year, Reliance Retail, which serves more than 3.5 million customers every week through its nearly 10,000 physical stores in more than 6,500 cities and towns in the country, has now raised over 6.4 billion.

Ambani, who raised more than $20 billion this year from a pool of mega investors including Facebook and Google for Jio Platforms, is expected to raise another couple of billion dollars by the end of the year for Reliance Retail. Amazon, which has invested over $6.5 billion into its Indian business to date, is one of the businesses that is widely expected to invest in Reliance Retail.

At present, the two commerce giants are caught in a deadlock over Reliance’s $3.4 billion acquisition of several Future Retail businesses, which is India’s second largest retail chain. Amazon, which holds a small interest in one of the subsidiaries of Future Retail, is fighting a legal battle to block Reliance’s agreement with Future Retail. Future Retail and Reliance Industries have said that they intend to proceed with their deal.

Mukesh Ambani
Mukesh Ambani
Chairman & MD
Reliance Industries

“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.”

As for Reliance Retail, through a joint venture with Jio Platforms, the retail chain entered the eCommerce space with JioMart last year. Now, JioMart has a presence in over 200 cities and towns in India, and it also maintains a WhatsApp integration partnership with US-based social media giant Facebook.

Facebook, which earlier this year invested $5.7 billion in Jio Platforms, has said it will explore different ways of working with Reliance to digitize the 60 million mom and pop stores (locally-owned, neighborhood stores) in the country, as well as other small and medium-sized businesses.

“We are pleased to be furthering our trusted partnership with Reliance Industries, the leading player in some of India’s most exciting sectors,” said Yasir Al-Rumayyan, Governor of PIF, in a statement. “This investment further demonstrates PIF’s commitment to generating returns for the Saudi people and driving the economic diversification of Saudi Arabia.”