Qatar fund to acquire around 1% stake in Reliance Retail for Rs 8,278 cr

Qatar Investment Authority (QIA) will acquire around 1 per cent stake in Reliance Retail Ventures Ltd (RRVL), the retail arm of billionaire Mukesh Ambani-led Reliance Industries, by investing Rs 8,278 crore ($1 billion).

A QIA's wholly-owned subsidiary will make the investment in India's largest retailer at a valuation of  Rs 8.278 lakh crore ($100 billion).

Updating about the development, Reliance Industries in a regulatory filing said: "QIA's investment will translate into a minority equity stake of 0.99 per cent in RRVL on a fully-diluted basis."

RRVL is the holding company for all retail businesses of Reliance Industries Ltd (RIL).

Through its subsidiaries and associates, RRVL operates India's largest, fastest-growing, and most profitable retail business with an integrated omnichannel network of over 18,500 stores and digital commerce platforms.

Commenting over the development, RRVL director Isha Mukesh Ambani said investment by QIA is a strong endorsement of a positive outlook towards Indian economy and Reliance's retail business model, strategy and execution capabilities.

”We are delighted to welcome QIA as an investor in RRVL.

"We look forward to benefitting from QIA's global experience and strong track record of value creation as we further develop Reliance Retail Ventures Limited into a world-class institution, driving transformation of the Indian retail sector."

QIA CEO Mansoor Ebrahim Al-Mahmoud said: "QIA is committed to supporting innovative companies with high-growth potential in India's fast-growing retail market.

"We are looking forward to Reliance Retail Ventures Limited, with its strong vision and impressive growth trajectory, joining our growing and diverse portfolio of investments in India."

Earlier in 2020, RRVL had raised Rs 47,265 crore (around $6.4 billion) from global private equity funds for a 10.09 per cent stake, valuing the company at more than Rs 4.2 lakh crore.

This was the largest fundraising exercise in the sector at that time.

The company had raised funds from Silver Lake, KKR, Mubadala, Abu Dhabi Investment Authority, GIC, TPG, General Atlantic and Saudi Arabia's Public Investment Fund at a valuation of around $57 billion at that time.

RRVL, is aggressively expanding its business here by acquiring the companies and getting the franchise rights of leading international brands.

In its latest annual report, RIL had said Reliance Retail had achieved a a significant milestone of crossing a billion transactions and its registered user base has grown to 249 million.

In FY23, Reliance Retail's digital commerce and new commerce businesses contributed to 18 per cent of its revenue, which stood at Rs 2.60 lakh crore.

Its board had on July 4, 2023, approved the proposal in which shares held by such shareholders shall stand cancelled and extinguished as per the capital reduction plan.

Besides, Reliance Retail which had forayed into the FMCG, relaunching the iconic beverage brand Campa and its own brand 'Independence', has plans to expand it.

Its beauty business also launched the digital commerce platform 'Tira' and opened its flagship store in Mumbai.

"These businesses will be ramped up progressively in the coming period," the annual report had said.

The business also expanded its product basket through acquisitions and partnerships at both local and global levels like Metro, Campa Cola, GAP, Pret A Manger, Lotus, Sosyo, Maliban and Toffeeman.