Middle East sovereign wealth funds including the Abu Dhabi Investment Authority and Saudi Arabia’s Public Investment Fund are in talks to buy stakes in Reliance Retail, the arm of Indian billionaire Mukesh Ambani’s empire that is seeking to raise $5.7bn by selling new shares.
Adia is in discussions about an investment of $750m at a valuation of roughly $57bn, according to people familiar with the matter, while the PIF could funnel as much as $1.5bn into the entity controlled by Mr Ambani’s oil-to-telecoms conglomerate Reliance Industries. Mubadala may also take a stake.
Adia, Mubadala, PIF and Reliance declined to comment.
The new round of fundraising comes only weeks after Mr Ambani, Asia’s richest man, secured $20bn in investments for his digital business Jio Platforms from 13 global investors. Some of these investors were offered the first opportunity to invest in the retail business.
The flurry of deals for stakes in Reliance’s businesses began this year when Facebook invested $5.7bn in Jio. It has highlighted how global investors see Mr Ambani’s sprawling and powerful conglomerate as their best way into the enormous Indian market at a time when relations with China are souring.
KKR has also expressed interest in an investment, with one person familiar with the matter saying the private equity group could funnel up to $1.5bn. A second person, close to KKR, said it “is looking at it but it is still early”. Bloomberg first reported KKR’s interest.
US private equity group Silver Lake said on Wednesday that it would invest $1bn into Reliance Retail, confirming talks first reported by the Financial Times.
Jio’s other investors included Google, which put in $4.5bn, along with private equity groups such as General Atlantic and Vista Equity Partners. The fundraising into Jio helped Reliance cut its net debt, which it had accumulated building the business, from more than $20bn to zero.
The latest investments are poised to help Reliance, which already runs India’s largest brick-and-mortar retail business, push into the country’s fast-growing market for online shopping and take on competitors such as Amazon and Walmart-owned Flipkart.
The new fundraising is to help grow the retail business, with investment in logistics and warehouses.
Through Jio and retail, Mr Ambani has sought to diversify from petrochemicals into online and consumer-facing businesses catering to India’s growing middle class. India’s retail market was worth an estimated $850bn a year before the pandemic.
Reliance runs a network of grocery and electronics stores, as well as the India outlets of global brands such as Armani and Tiffany. It also bought British toy retailer Hamleys last year.
The company in August acquired the retail assets of the Future Group, India’s second-largest retailer, giving it control of about one-third of the organised retail sector.
This year it launched JioMart, an ecommerce venture that it has paired with Facebook’s WhatsApp service, giving it potential access to the messenger’s 400m users.
Additional reporting by Kaye Wiggins