Qatar Investment Authority infuses $1 bn into Reliance’s retail arm

Sovereign wealth fund Qatar Investment Authority (QIA) has announced a $1 billion investment in Reliance Industries Ltd’s retail subsidiary.

The investment, which will be made through a wholly owned subsidiary of QIA, will translate into a 0.99% stake in Reliance Retail Ventures Ltd (RRVL), and values the entity at $100 billion, the companies said.

Led by Isha Ambani, billionaire Mukesh Ambani’s daughter, RRVL operates a network of more than 18,500 stores and digital commerce platforms across grocery, consumer electronics, fashion and lifestyle, and pharma. 

“We are delighted to welcome QIA as an investor. We look forward to benefiting from QIA’s global experience and strong track record of value creation as we further develop into a world class institution, driving transformation of the Indian retail sector. The investment by QIA is a strong endorsement of a positive outlook towards Indian economy and Reliance’s retail business model, strategy, and execution capabilities,” Isha Ambani, director at RRVL, said.

During the height of the covid pandemic in 2020-21, RIL sold a little more than a 10% stake in RRVL to a clutch of nine global entities for about $5.72 billion at a valuation of $50 billion.

The entities included Abu Dhabi sovereign wealth fund Mubadala, Abu Dhabi Investment Authority, private equity firm General Atlantic, investment firm TPG Capital, Silver Lake Partners, Saudi Arabia’s Public Investment Fund, Singapore’s GIC, investment firm KKR, and SLP Co-investors.

The shareholding of the above nine investors and QIA in RRVL now comes to 11.7%.

QIA has been a prolific investor in India, with the company focusing on companies in the technology, media and telecom, retail, and green energy sectors.

Mansoor Ebrahim Al-Mahmoud, chief executive officer at QIA, said, “QIA is committed to supporting innovative companies with high-growth potential in India’s fast growing retail market. We are looking forward to RRVL, with its strong vision and impressive growth trajectory, joining our growing and diverse portfolio of investments in India.”

Morgan Stanley acted as financial advisor to RRVL, while Cyril Amarchand Mangaldas and Davis Polk and Wardwell acted as legal counsels. 

Goldman Sachs, acting as financial advisor to RIL, advised on the process and transaction structuring.

AZB and Cleary Gottlieb acted as legal counsel to QIA.