It has been reported that the Qatar Investment Authority is currently engaged in discussions, with Reliance Retail regarding an investment that could range from $950 million to $1 billion. The Qatari sovereign fund is considering investing at a valuation of $100 billion, which’s double the valuation of the previous round. This move highlights Qatar’s investment strategy in India as it competes with investors from Abu Dhabi and Saudi Arabia. Under the leadership of Isha Ambani, Reliance Retail continues to expand its presence in the market. Has experienced revenue growth during the June quarter. This investment can be seen as a precursor to a listing, for the company.
According to sources Reliance Retail is currently, in negotiations with the Qatar Investment Authority (QIA) for an investment of approximately $950 million to $1 billion.
It is reported that the Qatari sovereign fund intends to invest at a valuation of around $100 billion, which’s double the valuation from the previous funding round conducted three years ago. In 2020 Saudi Arabia’s Public Investment Fund invested $1.3 billion for a 2.04% stake in Reliance Retail Ventures valuing the company at $62.4 billion at that time. Other shareholders include KKR, TPG, and two Abu Dhabi-based sovereign investment funds.
However, QIA did not participate in that particular funding round. Although discussions have been ongoing for months they were previously hindered by disagreements over valuations. The proposal is currently awaiting clearance from the QIA board and is expected to be approved next month. This investment round is seen as a precursor to Reliance Retail’s future listing on the stock market.
At times QIA has emerged as an investor in India competing with counterparts from Abu Dhabi and Saudi Arabia. The fund has not only supported James Murdoch’s media and education venture called Bodhi Tree but has also backed various Indian startups such, as Byjus, Rebel Foods, and Swiggy.
The valuation of Reliance Retail, estimated at $100 billion is slightly lower than the estimate by Alliance Bernstein in May which valued it at around $131 billion. However other sources like Ambit Capital recently estimated it to be around $57 billion while JM Financial placed its valuation at $100 billion.
Reliance Industries owns 85 percent of Reliance Retail Ventures and undertook a series of fundraising activities during the Covid pandemic to reduce its debt burden. Through asset monetization equity funds and investments from Gulf wealth funds, they were able to raise over Rs 3.24 lakh crore. Additionally, they conducted a $7 billion rights issue to clear all their debts.
Reliance Retail Ventures announced its results for the June quarter led by Isha Ambani, daughter of Mukesh Ambani. They reported a revenue of Rs 69,962 crore, for this period showing a growth of 19.5 percent compared to the year’s revenue of Rs 58,569 crore.
Reliance is actively expanding its presence through store expansion strategies. They are leveraging their omnichannel capabilities. Expanding their footprint while also extending JioMart into consumer electronics and fashion and lifestyle sectors.
Moreover, the recent endeavors of the company such, as venturing into the moving consumer goods (FMCG) sector and acquiring Metro indicate a focus on establishing a diverse range of brands and fortifying the supply chain.
Although organized retail and wholesale currently constitute 10-15 % of India’s FMCG sales market players like Reliance, which holds over half of the organized market share are gaining increasing influence over supplies. With 4,000+ fashion and apparel stores under its belt—featuring brands like Trends, Centro, Azorte, and Fashion Factory—Reliance undisputedly dominates this segment.
In the year 2022 23 Reliance Retail expanded its physical store network by opening over 3,300 new stores. As a result, their total number of stores reached a count of 18,040. Furthermore, their gross revenue witnessed a growth rate of 30% amounting to Rs 1.99 lakh crore. The company also made strides in augmenting its supply chain infrastructure by adding a warehouse space measuring approximately 12.6 million square feet during that year.
Over the decade or so Reliance Retail has achieved a compounded annual growth rate (CAGR) of 17%, with consumer electronics experiencing the highest expansion rate. However in years ( within the last five) remarkable growth has been primarily driven by fashion and lifestyle products (with a significant expansion rate of 43%) closely followed by groceries witnessing a solid growth rate of 41%. Fashion plays a role, in driving profitability as it generates the highest margins at 24%.
During the quarter of FY 2023-24, Reliance Retail witnessed a boost in net profit by 18.8% accompanied by a substantial 20.5% increase, in revenue. These impressive results were primarily attributed to the retailer attracting a record-breaking footfall of 249 million across formats. Notably Reliance Industries retail division achieved revenue of Rs 62,559 crore during the April-June period. Recorded a profit of Rs 2448 crore.
