Mubadala Mulls Investing Up to $1 Billion Stake in Indian's Reliance Retail Division

Published October 1st, 2020 - 09:30 GMT
Mubadala Mulls Investing Up to $1 Billion Stake in Indian's Reliance Retail Division
Mubadala, which is doing due diligence, could invest between $500 million and $1 billion in the latest offering. (Shutterstock)
 

Abu Dhabi state fund Mubadala Investment Co is reportedly in advanced talks to invest up to $1 billion in the retail division of India's Reliance Industries, according to Indian media reports.
 

The Abu Dhabi wealth fund's latest foray into India's attractive investment landscape comes weeks after it invested around $1.2 billion in Jio Platforms, a digital service company controlled by Asia's richest man Mukesh Ambani's Reliance Group.

While Jio has amassed $20 billion in investments over the past few months, another Indian conglomerate Tata Group is reportedly in talks with multinational retail giant Walmart for a potential investment in the latter's upcoming retail 'super app' in a deal worth $25 billion, the largest single bid so far in India's buoyant retail sector.

Reports quoting sources familiar with the new round of talks between the Abu Dhabi state fund and Reliance Group's Reliance Retail Venture (RRVL) said Mubadala, which is doing due diligence, could invest between $500 million and $1 billion in the latest offering from Ambani, which has become a magnet for global investors.

While a Reliance spokesman said the company could not confirm or deny any transaction, Mubadala, the second-biggest state investor in Abu Dhabi after Abu Dhabi Investment Authority, managing about $240 billion in assets, declined to comment, according to Reuters.

RRVL, which already has secured around $2.67 billion from KKR & Co, Silver Lake Partners, and General Atlantic in deals valuing it at a pre-money equity value of Rs4.285 trillion, also has several other suitors in the pipeline.

Sources familiar with RRVL deals said there are four more deals almost nearing conclusion. They include some of the funds from the Middle East like Mubadala. These deals, including offers from Carlyle and SoftBank, will be announced back-to-back in the next one month. L Catterton and Abu Dhabi Investment Authority are the other names doing the rounds.

Sources said Reliance targets to offload 15-20 per cent stake in RRVL, which has 12,000 stores across the country, to private equity players and strategic investors to raise up to Rs800 billion. The retail giant recently announced its acquisition of the retail, logistics and warehousing business of Future Group for Rs247.13 billion. Reliance will also pick up a 13 per cent stake in Kishore Biyani's remaining business under Future Enterprises Ltd.

Ambani's push to seek investments in its retail business come as the oil-to-telecoms Indian conglomerate has been looking to expand its e-commerce operations to compete against Walmart's Flipkart and Amazon.com's Indian business. Flipkart, India's leading ecommerce marketplace, is majority-owned by Walmart through a $16 billion acquisition in 2018.


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