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Saudi’s PIF makes second investment in Reliance

Saudi Reliance Retail_IF_Image
Reliance Retail will receive $1.3 billion from the sovereign fund in exchange for 2.04 percent stake

Reliance Retail has announced that it will receive $1.3 billion from the Kingdom of Saudi Arabia’s sovereign wealth fund. The Kingdom will make the investment from the Public Investment Fund in exchange for 2.04 percent stake in the company. 

It is reported that the Kingdom’s  investment in Reliance Retail will be made at a  pre-money equity valuation of $62.4 billion. In June, the Public Investment Fund had invested $1.5 billion in the digital arm of Reliance Industries, Jio Platforms. 

Reliance Retail has reported a consolidated turnover of $21.7 billion, in addition to a net profit of $726.4 million. The company said in a statement “India’s retail sector is one of the largest in the world and accounts for over 10 percent of its gross domestic product, which presents meaningful growth potential.” 

Currently, the company has a total of 12,000 stores operating in India. These stores are across divisions such as consumer electronics, grocery, general merchandise and lifestyle. 

Last month, the Kingdom’s sovereign wealth fund was contemplating investment in Lulu Group International, which has established the largest hypermarket chains in the Middle East. The Public Investment Fund was considering to acquire a minority stake in the company, media reports said, 

Previously, the Public Investment Fund was a holding company for government stakes in domestic businesses. In 2015, its mandate was broadened by Crown Prince Mohammed bin Salman, thereby including international investments to underpin economic diversification. It is reported that the fund is seeking new investment opportunities as the economy is weakened by the protracted coronavirus pandemic.

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