Booming Alliance: Reliance Retail Is Valued $62 Billion After $1.3 Billion Investment From PIF

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A king at the helm, the expansion of whose kingdom never seems to cease.

And when alliances are forged to the end of market domination, it really decks up the scenario in gold.

Reliance Retail’s roadmap seems to be consistent with this ideology.

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In the latest development, Reliance Retail has raised a colossal $1.3 billion from Saudi Arabia’s The Public Investment Fund (PIF), which is also one of the world’s largest sovereign wealth funds. The Saudi’s Public Investment Fund has thrown all its weight behind the construct of another empires by Reliance as well; The jumbo investments of $1.5 billion in Reliance Jio Platforms and another $1 billion in Jio fiber-optic business shows the confidence PIF has got in Reliance.

With the latest investment from PIF, Reliance has raised Rs 47,265 crores, in total, for its Retail Venture.

The nitty-gritty of the deal will see PIF gather a 2.04% stake in its retail unit for the hefty investment. The move, which saw the distinguished global investors value Reliance Retail Ventures Limited at $62.4 billion will undoubtedly help in a symbiotic strengthening of PIF’s presence in India’s propitious retail market with Reliance Retail.

At present, the giant that Reliance Retail is, already serves in excess of 3.5 million customers weekly, as per data from the start of the year. This quota is obtained via the presence of 11,930+ physical stores mapped across more than 6,500 cities and towns in the country.

The ambition of tapping the Indian retail market has seen Reliance locked in a three-way tussle with Walmart owned Flipkart and Amazon India. While Walmart’s acquisition of Flipkart gave it more room for development via the online space, Reliance Retail still holds the upper hand in the physical assets. Not to mention the legal controversy it has been embroiled in with Amazon.com Inc. over Future Group’s deal. Realising the potential of the 1.3 billion strong consumers in the country, Reliance Retail has been fighting tooth and nail to gain every inch on their rivals and has raised over $6.4 billion since September this year.

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If one steps back and glances at the patterns, there are definitely some similarities that can be drawn with Jio Platforms’ rise to the top. While Jio exploded out of nowhere onto the telecom scene, the spin-off from the Reliance conglomerate Jio Platforms (built on the telecom business of its operator Jio) has maintained a no-nonsense fast-growing mantra of growing while catering to what is essential to people.

Add to this, the retail chain’s partnership with Facebook for WhatsApp integration has seen it enter the e-commerce space with JioMart through a joint venture with Jio Platforms. With a committed Facebook’s investment of $5.7 billion in Jio Platforms earlier this year in a bid to explore various ways to digitize the nation’s small and medium-sized businesses, the leviathan that Reliance Retail is evolving into will be unequalled.

Ambani has mooted his welcome and contentment with PIF, which was founded in 1971 as a sovereign wealth fund for the purpose of investing funds on behalf of the Government of Saudi Arabia.

The new chapter with the PIF, proclaimed as the world’s most impactful investor, along with Saudi Arabia will definitely see Reliance Retail embark on a new travail.

The possibilities for which will stretch as far as Ambani’s vision.

Stay tuned to this space for more updates.

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