According to three persons with knowledge of the negotiations, the Qatar Investment Authority (QIA), Qatar’s sovereign fund, is in talks to acquire a share in Mukesh Ambani’s Reliance Retail Ventures, an Indian business magnate.
According to the publication, the purchase had not yet received approval from the Qatari sovereign fund and was still in the process of being finished.
According to sources cited by the Financial Times on Wednesday, Qatar’s sovereign fund Qatar Investment Authority (QIA) is aiming to acquire a small share in Indian billionaire Mukesh Ambani’s Reliance Retail Ventures.
According to an FT story, the QIA may think about choosing a minority position in RRVL, with a $1 billion investment giving it a holding of roughly 1% and valuing the company at approximately $100 billion.
Ambani has previously stated that he intended to float his retail businesses at some point, but he has yet to provide a date or other information.
Reliance Retail Ventures is home to retail businesses like global alliances and consumer goods companies.
The billionaire’s daughter Isha Ambani is the CEO of Reliance Retail, which specializes in both online and brick-and-mortar retail.
In recent years, it has collaborated with several international companies, like Burberry, Pret A Manger, and Tiffany, to establish and grow its presence in India.
According to calculations by major stock broker JPMorgan, Reliance Retail has an indicated equity value of $102 billion and an enterprise value of $112 billion. It is valued at $110 billion by UBS, $111 billion by Bernstein, and $105 billion by domestic brokerage JM Financial.
Given that RRVL’s EBITDA is 2-4% larger than that of RRL and it also has a few other investments/assets in addition to its interest in RRL, we estimate the equity value for RRVL at Rs 8,600 billion ($105 billion).
2020 saw RIL sell a 10.52% interest in RRVL to a number of PE investors at a time when the company’s valuation was anywhere between Rs 4.2 and 4.3 lakh crore.
According to Reliance’s most recent financial report, its retail division reported quarterly sales of Rs 69,948 crore, up 19.5% YoY, and EBITDA of Rs 5,139 crore, up 33.9% YoY.
In the quarter, 555 new stores were opened.
“I’m happy to report that the quarter’s financial performance was solid and in line with our corporate objectives. Our position as a market leader has been further cemented by the consistent increase across all consumption baskets. To make shopping more enjoyable for our consumers, we continue to innovate and develop in our physical shops and digital platforms,” according to Isha M. Ambani, Executive Director, RRVL.
In organized retail, RIL’s retail division dominates the groceries, fashion and leisure, and electronics categories. It is the biggest physical retailer in India across all categories, and it also offers a variety of digital services including Ajio and JioMart. Additionally, Reliance is growing its own portfolio of consumer brands.
