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Gulf SWFs eyeing Ambani's retail unit

Issac John /Dubai
issacjohn@khaleejtimes.com Filed on September 18, 2020 | Last updated on September 18, 2020 at 10.02 pm
Mukesh Ambani's empire has become the Apple of multiple investors' eyes.

(AFP)

Mubadala, Adia and PIF reportedly in negotiations with Reliance Retail Ventures

Indian billionaire Mukesh Ambani's offline and online retail business has now become the latest cynosure for global investors and sovereign wealth funds weeks after his digital services firm Jio Platforms has raised Rs1.52 trillion from overseas.

From the Gulf, state investment funds from the UAE and Saudi Arabia, including Mubadala Investment, the Abu Dhabi Investment Authority (Adia) and Saudi Arabia's Public Investment Fund (PIF), are also reportedly in negotiations with Reliance Retail Ventures (RRVL), the holding company of offline and online retail business of Reliance Industries (RIL).

Other overseas investors seeking a stake in India's booming retail spectrum include L Catterton, KKR, Carlyle Group and SoftBank Group. Most of these suitors have already invested in RIL's Jio Platforms.

RRVL seeks to offload up to a 15 per cent stake to private equity players and strategic investors to raise up to Rs800 billion, while reserving the largest allocation of 40 per cent for Amazon.com.

The Indian retail giant, which has 12,000 stores across the country, recently announced its acquisition of retail, logistics and warehousing business of Future Group for Rs247.13 billion.

Reliance also signalled it would pick up 13 per cent stake in Kishore Biyani's remaining business under Future Enterprises.

According to informed sources, some of these global funds are in an advanced stage of negotiations valuing RRVL at Rs4.2 trillion based on private equity giant Silver Lake's acquisition of 1.75 per cent stake for Rs75 billion. Jio Platforms, in which 13 investors altogether picked up 32.97 per cent stake, is valued at Rs4.91 trillion.

Western and Indian media reports said while Mubadala is weighing an investment of about $750 million in Reliance Retail, Adia is pondering a similar investment and PIF could funnel as much as $1.5 billion, according to the Financial Times, citing people familiar with the matter.

Sources close to RIL said Ambani is offering to sell a roughly $20 billion stake in the retail business to the US tech giant, which could be equivalent to as much as a 40 per cent holding. A deal, if successful, would be the biggest ever in India as well as for Amazon, according to Bloomberg.

Responding to media queries, an RIL spokesperson said the group evaluates various opportunities on an ongoing basis. "In light of a high incidence of speculative media queries and incorrect and ex parte media articles relating to purported capital transactions into Reliance Industries or our group companies, we would like to reiterate that as a policy, we do not comment on media speculation and rumours and we cannot confirm or deny any transaction which may or may not be in the works."

- issacjohn@khaleejtimes.com

Reliance Retail posted Rs1.63 trillion revenue in 2019-20, compared to Rs340 billion in 2016-17.
- issacjohn@khaleejtimes.com

author

Issac John

Editorial Director of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.


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