NEW DELHI / DUBAI: Abu Dhabi State Fund Mubadala Investment Co is in advanced talks invest up to $ 1 billion in the retail division of Reliance Industries Ltd of India, two sources told Reuters, as investor interest in the Indian company increases.
Reliance Retail is on a fundraising spree and has raised about $ 1.8 billion in recent weeks from KKR & Co and Silver Lake Partners.
Trust, controlled by the richest man in Asia Mukesh Ambani, has reached out to investors, who collectively pumped more than $ 20 billion into its Jio Platforms digital business this year, to take stakes in its retail business, which has nearly 12,000 stores and sells everything from groceries and electronics to fashion. and shoes.
Mubadala invested about $ 1.2 billion in Jio Platforms and its executives have had extensive discussions in recent weeks with Reliance to invest in their retail company, multiple sources familiar with the talks said.
While one source said Mubadala “is ready with” $ 1 billion for Reliance Retail and doing due diligence, a second source said the talks were in an advanced stage and said the investment could be between $ 500 million and $ 1 billion.
A Reliance spokesperson said the company cannot confirm or deny any transactions, adding: “the company evaluates various opportunities on an ongoing basis.
Mubadala declined to comment. It is the second largest state investor in Abu Dhabi after the Abu Dhabi Investment Authority, managing around $ 240 billion in assets.
For Mubadala, any additional investment in Reliance will come months after it said it had underinvestment in Asia and planned to expand its portfolio in the region.
Strong interest from investors
Reliance is likely to announce some investments in its retail unit soon, and those will be from investors who recently invested in its digital arm, said one of the sources familiar with the matter.
While talks are ongoing with several investors, Reliance believes Facebook Y Google, who invested in Reliance’s digital business, are unlikely to fund their retail division due to lack of synergies, another source said.
“Reliance wants the same pool of investors … but some new investors could come in,” the source said.
Japan’s SoftBank Group had also expressed interest in investing in Reliance Retail, but talks have not progressed as the company was prioritizing other investors with whom it has made recent deals, the source said.
SoftBank did not respond to a request for comment.
Ambani’s push to seek investment in its retail business comes as the Indian oil-to-telecommunications conglomerate has been looking to expand its e-commerce operations to compete against Walmart’s Flipkart and Amazon.com’s Indian business.
A separate source said that Amazon and Reliance have also been in talks, but there was no certainty of an agreement on an investment in Reliance Retail.
“For Amazon, the issue is whether its own ambitions in India will clash with Reliance’s,” the source added.
An Amazon spokeswoman said the company has no comment on speculation about what it may or may not do in the future.
.
