Reliance Retail Eyes $1.5B Investment From Gulf And Singapore Funds

Reliance Retail, the largest retail chain in India, is said to be in talks with a group of existing investors, including sovereign wealth funds from Singapore, Abu Dhabi, and Saudi Arabia, over a new set of investments totalling around $1.5 billion, as per a Reuters report on Monday.

What Happened: These negotiations are part of Reliance Retail’s internal strategy to raise $3.5 billion by the end of September. QIA recently announced a $1 billion investment, and KKR & Co. declared a $250 million investment just this week.

Entities such as Singapore’s GIC, the Abu Dhabi Investment Authority (ADIA), and Saudi Arabia’s Public Investment Fund (PIF) are considering investing at least $500 million each in Reliance Retail at a $100 billion valuation. However, these figures are subject to change.

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Reliance Industries, the parent company of the retail unit, also plans to participate in the ongoing fundraising round of $3.5 billion. Last year, Reliance sold a 10.09% stake in its retail division, valuing it at 4.68 trillion rupees ($56.4 billion).

Why It Matters: This move comes amidst a flurry of investment activity in Reliance Retail. As previously reported, KKR invested nearly ₹2,069.50 crore at a valuation of ₹8.361 lakh crore in the retail arm of Reliance, with the investment mainly coming from its Asian Fund IV.

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Earlier this month, it was reported that Reliance Retail was in advanced discussions with global investors to raise around $2.5 billion by the end of the month. In August, the company raised funds from the Qatar Investment Authority (QIA), leading to a gain in Reliance’s share price for two consecutive days.

The QIA, through a wholly owned subsidiary, invested ₹8,278 crore in Reliance Retail Ventures at a valuation of ₹8.278 lakh crore, translating to the QIA owning a 1% stake in the company. The fundraising efforts of Reliance Retail appear to be a part of a larger strategy to bolster its financial standing and possibly prepare for a listing.

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