Qatar’s sovereign wealth fund is in early talks to buy a minority stake in Mukesh Ambani’s Reliance Retail Ventures Ltd, citing sources familiar with the development told news agency Bloomberg. According to the report, the Qatar Investment Authority (QIA) wants to increase its bets in India and is among parties that are in talks to buy into Reliance Retail Ventures Ltd. The stake may amount to $1 billion, one of the sources privy to the developemnt said. Other oil-rich Middle Eastern investors looking to diversify their portfolios are also keen to invest in Ambani’s retail arm, sources told the news agency.
The deliberations are still at a preliminary stage and a deal may not happen soon, the sources added. The Financial Times first reported the discussions on Wednesday, citing three people with knowledge of the talks. Parent company Reliance Industries Ltd. rose as much as 2.5 per cent, the most since July 17, on Wednesday. "The company evaluates various opportunities on an ongoing basis,” a Reliance Retail spokesperson said. The QIA declined to Bloomberg’s request for comment.
The interest comes as Mukesh Ambani’s conglomerate is also considering a public listing for Reliance Retail and has started buying back shares in the unit and giving them to their employees as stock options. The subsidiary headed by Ambani’s daughter, Isha, is India’s biggest brick-and-mortar retailer and has been undertaken a swath of recent acquisitions.
Reliance Retail also raised over $6 billion three years ago from series of major investors, including the sovereign wealth funds of Saudi Arabia, Singapore and the United Arab Emirates, along with General Atlantic, KKR & Co. and Silver Lake Partners.
Last week, Reliance Retail reported earnings before interest, taxes, depreciation and amortization that jumped 34 per cent to Rs 51.5 billion ($628 million) in the quarter through June compared to the same period a year earlier.
Stock of Reliance Ltd is trading at Rs 2,527 apiece, up 1.89 per cent, at 1.55 pm on the BSE on Wednesday.