The two funds from Abu Dhabi, the richest of the seven emirates that form the UAE, have a diversified portfolio of investments spanning from infrastructure to technology. Both have earlier ploughed money into Ambani’s digital and telecom services unit Jio Platforms. Counting ADIA’s investment, Reliance Retail has raised Rs 37,710 crore from seven external investors by selling 8.5% stake. The investments have valued India’s largest and most profitable retailer at Rs 4.3 lakh crore.
The share sales in Reliance Retail also pave the way for its initial public offering, expected to take place in a few years from now. The listing could give the Indian retailer a higher valuation and investors an opportunity to exit.
Abu Dhabi, which has been scouring for deals in a pandemic-disrupted world, is betting on Ambani’s ability to tap growth in India’s market of billion-plus consumers where Covid has accelerated a shift in consumer behaviour from brick-and-mortar retail to e-commerce.
Significantly, UAE has a strong political and economic relationship with the Narendra Modi-led government. ADIA is a sponsor of India’s sovereign wealth fund National Investment and Infrastructure Fund (NIIF).
“This (Reliance Retail) investment is consistent with our strategy of investing in market-leading businesses in Asia linked to the region’s consumption-driven growth and rapid technological advancement,” said ADIA executive director (private equities) Hamad Shahwan Aldhaheri.
Besides NIIF, Jio Platforms and Reliance Retail, ADIA — the world’s third-largest sovereign wealth fund after China Investment Corporation and Norway Government Pension Fund Global — has investments in HDFC, Infosys, Bandhan Bank and Kotak Realty Fund, among other Indian companies.
With Ambani making retail and digital the centre of his business empire, away from the staple refining and petrochemical ventures, he has so far raised Rs 1.9 lakh crore by selling 8.5% and 33% stakes in Reliance Retail and Jio Platforms respectively.
