India's Reliance Retail is in discussions with existing investors, including Singapore's sovereign wealth fund GIC, Abu Dhabi Investment Authority ADIA, and Saudi Arabia's PIF, to secure combined investments totalling around $1.5 billion. These talks are part of Reliance Retail's goal to raise $3.5 billion by the end of September. GIC, ADIA, and PIF are considering investments of at least $500 million each, valuing Reliance Retail at $100 billion. The company sold a 10.09 percent stake in 2020 for $76.8 billion, with GIC, ADIA, and PIF among the investors. Reliance Industries, its parent company, may also participate in the fundraising round.
At the forefront of India's retail sector is Mukesh Ambani, the wealthiest individual in Asia, leading Reliance Retail. The company is actively engaging in discussions with its current investors, which include Singapore's sovereign wealth fund, the Abu Dhabi Investment Authority (ADIA), and Saudi Arabia's Public Investment Fund (PIF). These discussions are centred around the possibility of these investors collectively injecting approximately $1.5 billion into the retail giant, according to sources well-versed in the matter. Reliance Retail has set an ambitious goal of securing a total of $3.5 billion in investments by the end of September, a target previously reported by Reuters. Notably, QIA had already unveiled a $1 billion investment last month, while KKR recently pledged $250 million.
Insiders have revealed that Singapore's GIC, ADIA, and PIF are contemplating substantial investments of at least $500 million each, effectively valuing Reliance Retail at a staggering $100 billion. However, it is worth noting that all parties involved have refrained from making any official comments regarding these speculative discussions, with Reliance Retail stating that they do not comment on media speculation and rumours. Additional insights from sources suggest that some of these three prominent investors may ultimately contribute less than the aforementioned $500 million figure. Furthermore, Reliance Retail is reportedly exploring opportunities to collaborate with one or two additional investors as part of its comprehensive fundraising endeavour. Nevertheless, it is crucial to emphasize that the final investment decisions and funding strategies remain subject to potential adjustments.
GIC, ADIA, and PIF rank among the world's most formidable investment funds and collectively hold a significant 4.4 percent stake in Reliance Retail, India's largest retailer. Importantly, Reliance Industries, the parent company of Reliance Retail, is actively considering participation in the ongoing fundraising round, as per insights from two of the sources intimately acquainted with the matter. The significant progress Reliance Retail has made in fundraising serves as a testament to its commanding position within India's retail landscape. In 2020, Reliance Industries successfully divested a 10.09 percent stake in its retail unit, effectively valuing the company at an impressive 4.68 trillion rupees (approximately $76.8 billion in Singapore dollars). During this transaction, both GIC and ADIA invested $664 million each, while PIF contributed $1.15 billion, based on prevailing exchange rates.
A fourth source with knowledge of the deal revealed that the fundraising agreements for 2020 included a provision enabling existing investors to expand their holdings. These investment funds are now demonstrating significant interest in doing so. In a recent speech, Ambani stated that several prominent global strategic and financial investors have expressed robust interest in his company, although he did not disclose specific names. Back in 2019, the billionaire articulated his group's intentions to take the retail business public within a five-year timeframe. The significant investments reflect the extraordinary confidence that both domestic and international investors place in Reliance Retail. This affirmation solidifies the retailer's position as the industry leader and greatly fortifies its continuous expansion and growth initiatives in India's vibrant and dynamic retail landscape.
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