Saudi Arabia's PIF invests about US$1.3b in Mukesh Ambani's Reliance Retail

[RIYADH] Saudi Arabia's Public Investment Fund, or PIF, plans to invest about US$1.3 billion in Mukesh Ambani's retail unit as Asia's richest man continues to add marquee backers in a fundraising spree that has now surpassed US$6.4 billion.

The sovereign wealth fund will pick a 2.04 per cent stake in Reliance Retail Ventures for 95.55 billion rupees (S$1.74 billion), parent Reliance Industries said in an exchange filing Thursday. The stake sale values India's largest retailer at about US$62.4 billion, it said.

This will be the third investment for PIF in the conglomerate, helmed by Ambani, 63, as he seeks to transform Reliance Industries into a retail and technology behemoth and pivot away from its staple oil-refining business that he inherited in 2002.

The deal caps an active year for the PIF, which was transformed from a sleepy domestic focused holding company into an international investor, as part of Crown Prince Mohammed Bin Salman's plans to pare the economy's reliance on oil sales. The west Asian nation is also investing a lot in building ties with India, a key market for its crude oil. Reliance has been in talks with Saudi Aramco for a stake sale in its refinery unit, although the transaction is yet to fructify.

For Reliance, this deal underscores investors' faith in Mr Ambani's ability to tap growth in offline and online retail in the country of a billion-plus consumers.

The transaction also builds on Reliance's runaway success in raising more than US$20 billion by selling about 33 per cent of its technology venture, Jio Platforms, to investors including Facebook and Google.

Investor demand to buy into Ambani's retail unit has been so strong that the group had to put some investors such as Carlyle Group and Softbank Group on a waitlist, people familiar with the matter had said in September.

Shares of Reliance Industries have soared 30 per cent this year while the broader gauge S&P BSE Sensex has gained 0.2 per cent.

BLOOMBERG