Reliance Industries as a Private Equity LP

Ever since its early years, Reliance Industries Limited (RIL), India’s largest private sector enterprise, has believed in running an active treasury. Beyond supporting business requirements, RIL’s treasury has often taken investment positions, in areas like listed equity. In the ‘80s and ‘90s, it was a fairly commonplace practice amongst listed companies.

In recent years, as shareholders got more vocal, most listed companies have stopped investing in non-related listed equity purely for speculative purposes. RIL is no exception, it now seems to have stopped making non-strategic investments in listed stocks.

However, one new practice it seems to have started is: investing in Alternative Investment Funds, like Private Equity funds and Special Situation funds. Amongst listed firms, this is unusual. While promoters are known to invests in PE funds regularly as Limited Partners (LPs), for a listed company to do is a novelty. But then, RIL is usually ahead of the times.

As yet this is a tiny area for RIL. It seems to have investments in around 9-10 funds, aggregating around Rs 500 crore (~USD 65m).

Multiples is RIL’s largest bet. This is understandable. The fund was set up by Renuka Ramnath, who built ICICI Ventures, and is among the leading names in private equity investment in India. JM Financial is very close to RIL, it is the main lead manager of its equity issues, including the current rights. Faering and Paragon are apparently funds promoted by sons of leading financial luminary Deepak Parekh of HDFC; Aditya Parekh has co-founded Faering, while Siddharth Parekh has co-founded Paragon. 3one4 Capital is promoted by sons of Mohandas Pai, a seasoned investor himself, and ex-CFO of Infosys. It is not clear what is Gennext Venture fund, it does not seem to have a website. It could well be a group entity, and not a third-party fund, since the contact email given is an RIL email.

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