The QIA has also made investments in Indian startups Rebel Foods and Swiggy, an online food delivery platform.
Qatar’s sovereign wealth fund is currently in negotiations to acquire a small portion of the retail division of India’s billionaire Mukesh Ambani’s conglomerate, Reliance Industries, reports said.
The Qatar Investment Authority (QIA) is exploring the possibility of investing $1 billion in Reliance Retail Ventures, which would secure them an ownership stake of approximately 1%, the Financial Times reported on Wednesday.
This investment would value the entire business at approximately $100 billion, as cited by three individuals privy to the matter.
The agreement has not been officially concluded and is still subject to potential modifications, according to anonymous sources who requested not to be identified due to the confidentiality of the deal, the FT said. One individual mentioned that the Qatari sovereign wealth fund, with assets amounting to $450 billion, has not yet given its approval.
The discussions are taking place as Reliance Retail makes significant investments to grow its consumer-oriented ventures. As India’s largest retail conglomerate, encompassing diverse sectors from luxury fashion to groceries, Reliance Retail operates as a subsidiary of Mukesh Ambani’s massive conglomerate, Reliance Industries.
Regarding Reliance Industries, despite its significant profits driven by the vast petrochemicals unit, which includes the world’s largest oil refinery, the company has made substantial investments to diversify into various businesses, ranging from streaming services to shopping, with the aim of fostering future growth.
Reliance Industries holds the position of India’s largest company, boasting a market capitalisation of $205 billion.
Led by the billionaire’s daughter Isha Ambani, Reliance Retail operates various core retail ventures encompassing both digital and brick-and-mortar stores.
Recently, the company has forged partnerships with numerous international brands such as Burberry, Pret A Manger, and Tiffany, collaborating to launch and expand their operations in the Indian market.
In 2020, Saudi Arabia’s Public Investment Fund made an investment of $1.3 billion, securing a 2.04% ownership stake in Reliance Retail Ventures. This transaction valued the company at approximately $62.4 billion at that time.
Apart from the Public Investment Fund, other shareholders in Reliance Retail Ventures include the New York-based private equity firm KKR and two sovereign investment funds based in Abu Dhabi.
The QIA is following the lead of other Gulf sovereign wealth funds by aiming to boost its investments in Asia, particularly in India, the FT said. The QIA committed to investing up to $1.5 billion in James Murdoch’s new media and education venture in India called Bodhi Tree last year.
It has also made investments in Indian startups Rebel Foods and Swiggy, an online food delivery platform.
Reliance Industries owns an 85% stake in Reliance Retail Ventures.
In 2020, the company managed to clear its debts, which had surged to over $20 billion due to extensive spending on its Jio mobile network. To achieve this, Reliance Industries secured investments from Gulf sovereign wealth funds to Silicon Valley giants and successfully completed a $7 billion rights issue.
Qatar Investment Authority has yet to publicly comment on the matter.