Reliance Retail Engages Global Investors In $2.5 Billion Funding Talks

Reliance Retail Ventures, owned by Indian billionaire Mukesh Ambani, is in advanced discussions with global investors to secure approximately $2.5 billion in funding by the end of September. This move is in preparation for a potential stock market listing, according to individuals familiar with the matter who spoke to Reuters.

Three sources revealed that the company aims to raise $2.5 billion as part of an overall target of $3.5 billion. Part of this goal, specifically $1 billion, was already secured from the Qatar Investment Authority (QIA) and announced last month.

Reliance responded to these reports with an emailed statement, stating, “As a policy, we do not comment on media speculation and rumours,” but also noted, “Our company evaluates various opportunities on an ongoing basis.”

In the previous month, Reliance had disclosed that it had obtained $1 billion in funding from QIA, valuing India’s largest retailer at $100 billion. The company’s operations encompass a wide range of sectors, from grocery sales to electronics, and include international collaborations with brands such as Burberry and Pret A Manger.

According to two sources with direct knowledge, Morgan Stanley is advising Reliance on this fundraising process, although Morgan Stanley did not respond to requests for comment.

While the sources declined to reveal potential investors’ names, one source mentioned that Reliance was in discussions with at least two U.S.-based investors. The other two sources indicated that there was growing interest from existing foreign investors of Reliance, including sovereign wealth funds.

If the investment comes to fruition, it would reinforce India’s position as an attractive destination for Western private investors. These investors have been increasingly cautious about investing in China due to the country’s deteriorating economic outlook and geopolitical tensions.

In 2020, Reliance Retail successfully raised $5.71 billion by selling a 10.09% stake to investors, including KKR, the Saudi Public Investment Fund, General Atlantic, and the United Arab Emirates’ Mubadala.

Mukesh Ambani recently highlighted that the 2020 funding had valued the business at approximately $52 billion, and he mentioned that “in less than three years, the valuation of retail has almost doubled.”

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A fourth source, who possesses direct knowledge, suggested that Reliance could make two funding announcements within the next two weeks, with the company’s valuation being similar to QIA’s investment at around $100 billion. This implies that a potential $2.5 billion investment would represent a 2.5% stake in the company.

During the company’s annual general meeting on Monday, Mukesh Ambani hinted at the interest from global investors, stating, “Several marquee global strategic and financial investors have shown strong interest in Reliance Retail. I will update you about our progress with them in due course.” Ambani also mentioned in 2019 that the group intended to list the retail business within five years.

Reliance Retail’s expansion is led by Mukesh Ambani’s daughter, Isha Ambani. The company boasts over 18,000 retail outlets and is actively growing its e-commerce division, competing with industry giants like Amazon and Walmart’s Flipkart.

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