The government fund acquired the 2.04 percent stake in Reliance Retail Ventures (RRVL), it said in a statement on Thursday.
It is the latest high profile international deal concluded by the fund that has increased its global profile this year.
Reliance Retail operates around 12,000 stores across the country’s strategically important retail sector.
“This investment will further strengthen PIF’s presence in India’s dynamic economy and promising retail market segment,” the PIF said.
This latest expansion in India follows an earlier acquisition of a 2.32 percent stake in Jio Platforms, the digital services unit of Reliance Industries.
The Reliance conglomerate has interests in oil, petrochemicals and telecoms and is controlled by Indian billionaire Mukesh Ambani who is now investing heavily in the booming technology sector.
India’s retail industry is one of the largest in the world, accounting for 10 percent of the country’s GDP. However the sector has been hit hard by the spread of the coronavirus pandemic which has had a devastating impact on the wider economy.
PIF Governor Yasir Al-Rumayyan said: “This investment further demonstrates PIF’s commitment to generating returns for the Saudi people and driving the economic diversification of Saudi Arabia.”
Earlier this year the PIF completed the sale of its 70 percent stake in Saudi Basic Industries Corporation (SABIC) to Saudi Aramco for about $69.1 billion.
The Reliance retail deal represents the latest in a flurry of acquisitions by the Saudi fund as it seeks to diversify its holdings while also tapping attractive valuations across many sectors that have been impacted by the pandemic this year.
Abu Dhabi investment fund Mubadala said last month it also planned to invest more than $843 million in RRVL.