QIA to buy 0.99% stake in Reliance Retail at ₹8.278 lakh cr valuation

Qatar Investment Authority will be investing ₹8,278 crore in Reliance Retail Ventures Limited, a wholly-owned subsidiary of Reliance Industries, according to a regulatory filing by the company. This investment values Reliance Retail at a pre-money equity value of ₹8.278 lakh crore. Following the investment, Qatar Investment Authority will hold a 0.99% stake in Reliance Retail on a fully-diluted basis.

"We are delighted to welcome QIA as an investor in Reliance Retail Ventures Limited. 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. The investment by Qatar Investment Authority is a strong endorsement of a positive outlook towards the Indian economy and Reliance’s retail business model, strategy and execution capabilities," says Isha Mukesh Ambani, Director, Reliance Retail.

Reliance Retail says it aims to galvanise the domestic retail sector through an inclusive strategy by serving millions of customers, empowering micro, small and medium enterprises (MSMEs) and working closely with global and domestic companies as a preferred partner, to deliver immense benefits to Indian society, while protecting and generating employment for millions of Indians.

"QIA is committed to supporting innovative companies with high-growth potential in India’s fast-growing retail market. We are looking forward to Reliance Retail Ventures Limited, with its strong vision and impressive growth trajectory, joining our growing and diverse portfolio of investments in India," says Mansoor Ebrahim Al-Mahmoud, CEO, Qatar Investment Authority.

Morgan Stanley acted as financial advisor to Reliance Retail Ventures Limited and Cyril Amarchand Mangaldas and Davis Polk & Wardwell acted as legal counsels. Goldman Sachs, acting as financial advisor to RIL, advised on the process and transaction structuring.

In 2020, the Isha Ambani-led company raised ₹47,625 crore from global investors at a pre-money equity value of ₹4.21 lakh crore.

Ahead of the announcement, shares of Reliance Industries closed 0.16% higher at ₹2,523.15 in line with the broader BSE Sensex. During the session, Reliance Retail’s market capitalisation stood at ₹17.07 lakh crore as more than 1.57 lakh shares exchanged hands on BSE against the two-week average of 3.07 lakh shares.

The company which has 18,040 stores across India witnessed a 29% year-on-year increase in user base to 249 million in FY23 as against 193 million in FY22. Covering approximately 65.6 million sq ft of store area which is a more than 50% growth of retail space as compared to the previous year, footfalls in retail stores have also increased by 50% from last year to 780 million in FY23.