Qatar Investment Authority will be investing ₹8,278 crore (around $1 billion) in Reliance Industries’ subsidiary, Reliance Retail Ventures for 0.99 per cent equity stake at an equity valuation of ₹8.3 lakh crore, double that of three years ago
In 2020, Reliance Retail Ventures had raised ₹47,265 crore from a clutch of global investors for a 10 per cent equity stake. The equity valuation had then been ₹4.2 lakh crore. The company said in an exchange filing that the transaction valued RRVL “among the top four companies by total equity value in the country.”
RRVL operates all the retail and consumer-facing businesses of RIL, spanning grocery, consumer electronics, fashion and lifestyle, and pharmaceutical products.
“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 the transformation of the Indian retail sector,” Isha Ambani, Director, said in the statement.
The company said that QIA’s “investment comes as the Qatari fund seeks to further invest in India’s fast-growing economy.” The announcement is also significant as it comes just ahead of RIL’s annual general meeting on August 28.
RRVL is expected to be listed soon, and Mukesh Ambani, who is known to make major announcements at AGMs, may give some timeline for this as well. The conglomerate recently listed Jio Financial Services, its first in about 17 years.
Retail is a significant contributor to the RIL Group’s revenues. In FY23, RRVL reported revenue of $31.7 billion, while operating profit was $2.2 billion.
With a customer base of around 250 million and over 18,000 stores, it occupied a total store area of 66 million square feet at the end of March.
Its expansion is being fuelled by strategic acquisitions as well as organic growth. The fresh funds from QIA will be used partly for acquisitions.
The stock of RIL has appreciated about 9 per cent so far in 2023.