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HomeEconomySaudi Arabia's PIF invests Rs 95.55 billion in Reliance Retail

Saudi Arabia’s PIF invests Rs 95.55 billion in Reliance Retail

Saudi's Public Investment Fund, a sovereign wealth fund, will pick a 2.04% stake in Mukesh Ambani's Reliance Retail and will be its third investment in the conglomerate.

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Mumbai: Saudi Arabia’s Public Investment Fund, or PIF, plans to invest about $1.3 billion in Mukesh Ambani’s retail unit as Asia’s richest man continues to add marquee backers in a fundraising spree that has now surpassed $6.4 billion.

The sovereign wealth fund will pick a 2.04% stake in Reliance Retail Ventures Ltd. for 95.55 billion rupees ($1.3 billion), parent Reliance Industries Ltd. said in an exchange filing Thursday. The stake sale values India’s largest retailer at about $62.4 billion, it said.

Investor Date Announced Amount (INR Billions) Stake (%)
PIF Nov. 5 95.55 2.04
ADIA Oct. 6 55.1 1.20
TPG Oct. 3 18.4 0.41
GIC Oct. 3 55.1 1.22
Mubadala Oct. 1 62.5 1.4
General Atlantic Sept. 30 36.8 0.84
KKR & Co. Sept. 23 55.5 1.28
Silver Lake +co-investors Sept. 9, 30 93.8 2.13
Total 472.75 10.52

Source: Company Filings

Key insights

  • This will be the third investment for PIF in the conglomerate, helmed by Ambani, 63, as he seeks to transform Reliance Industries into a retail and technology behemoth and pivot away from its staple oil-refining business that he inherited in 2002.
  • The deal caps an active year for the PIF, which was transformed from a sleepy domestic focused holding company into an international investor, as part of Crown Prince Mohammed Bin Salman’s plans to pare the economy’s reliance on oil sales.
    • The west Asian nation is also investing a lot in building ties with India, a key market for its crude oil. Reliance has been in talks with Saudi Aramco for a stake sale in its refinery unit, although the transaction is yet to fructify.
  • For Reliance, this deal underscores investors’ faith in Ambani’s ability to tap growth in offline and online retail in the country of a billion-plus consumers.
  • The transaction also builds on Reliance’s runaway success in raising more than $20 billion by selling about 33% of its technology venture, Jio Platforms Ltd., to investors including Facebook Inc. and Google.
  • Investor demand to buy into Ambani’s retail unit has been so strong that the group had to put some investors such as Carlyle Group Inc. and Softbank Group Corp. on a waitlist, people familiar with the matter had said in September.

Market performance

  • Shares of Reliance Industries have soared 30% this year while the broader gauge S&P BSE Sensex has gained 0.2%.

Also read: Why the Mukesh Ambani vs Jeff Bezos fight could be more of a waiting game


 

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