Mukesh Ambani cashes in yet another cheque from PIF — Saudi Arabia’s sovereign fund to invest $1.3 billion in Reliance Retail

Mukesh Ambani cashes in yet another cheque from PIF — Saudi Arabia’s sovereign fund to invest $1.3 billion in Reliance Retail
BCCL
  • Reliance Retail has raised $1.3 billion from Saudi Arabia’s sovereign fund – Public Investment Fund.
  • In June, Saudi PIF had invested ₹11,367 crore ($1.5 billion) in Jio, while along with Abu Dhabi Investment Authority, it invested over a billion dollars in the company’s Fibre InvIT.
  • Reliance Retail has now raised a total of ₹47,265 crore while giving up a 10.52% stake in the company.
Reliance Retail has raised $1.3 billion from Saudi Arabia’s sovereign fund – Public Investment Fund. This is Saudi PIF’s third big investment into Reliance Industries, having already invested in Reliance Jio and as well as in the company’s Fibre InvIT. This is also the eighth big-ticket investment that Reliance Retail has raised in the last two months.

In June, Saudi PIF had invested ₹11,367 crore ($1.5 billion) in Jio, while along with Abu Dhabi Investment Authority, it invested over a billion dollars in the Fibre InvIT.

“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,” said RIL Chairman Mukesh Ambani in a statement.

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Reliance Retail has now raised a total of ₹47,265 crore, while giving up a 10.52% stake in the company. Interestingly, this round saw Reliance Retail being valued at $62.4 billion whereas it stood at $58 billion for other investments.

Reliance Retail: The flurry of global investments
CompanyInvestment in Reliance RetailStake in Reliance RetailDate of Investment
Silver Lake₹9,375 crore2.13%September 9 (first investment)September 30 (second investment)
KKR₹5,550 crore1.28%September 23
General Atlantic₹3,675 crore 0.84%September 30
Mubadala₹6,247.5 crore1.4%October 1
TPG₹1,837.5 crore0.41%October 3
GIC₹5,512.5 crore1.22%October 3
ADIA₹5,512.5 crore 1.20%October 6
Saudi PIF₹9,555 crore 2.04%November 5

“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,” said Yasir Al-Rumayyan, Governor of PIF.

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Saudi Arabia’s sovereign fund – Public Investment Fund, comes under the royal family of Mohammad bin Salman‎. MBS, as he is popularly known, is one of the most prominent tech investors. In August 2019, the Saudi state-owned oil refiner, Aramco ⁠— one of the largest in the world ⁠— had agreed to buy a 20% state in the Reliance Industries’ oil to chemicals business for $15 billion. That deal is still in the waiting line.

Reliance Retail – the next cash cow for Mukesh Ambani

All eyes are on Mukesh Ambani’s Reliance Retail as India’s richest man focuses on retail for his next chapter of growth. The sector is also fast growing; even as Reliance’s second-quarter profit fell massively, its retail segment managed to stand out. The revenue from the retail segment stood at ₹41,100 crore, that’s nearly as much as the ₹42,000 crore clocked between July and September 2019.

“Retail business activity has normalised with strong growth in key consumption baskets as lockdowns ease across the country,” Ambani had said in a statement. The total number of stores stood 11,931, with an addition of 125 stores during the quarter.
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