Reliance Industries has put Rs 4,330 crore into its main retail business, Reliance Retail, during the last financial year. This was revealed in a recent report filed with the Ministry of Corporate Affairs. Unlike the previous year, when the funding was done entirely through debt, this time it used both equity and debt.
Investment
The money was invested through Reliance Retail Ventures (RRVL), a fully-owned subsidiary of Reliance Industries, which oversees all its retail activities. Reliance Retail also transferred its supply chain assets to a new company, Reliance Logistics and Warehouse Holdings (RLWH), valuing these assets at Rs 8,000 crore. This decision was approved by the Reliance Retail board in March.
Experts say this move will help Reliance Retail gain more value from its supply chain assets. Recently, companies like Abu Dhabi Investment Authority (ADIA) and KKR have invested in RLWH. Last year, RRVL created an infrastructure investment trust (InvIT) to manage about half of its retail warehousing assets. Earlier this year, RRVL transferred more warehousing assets to RLWH.
InvIT Plan
“Reliance Retail aims to unlock value from strategic assets, easing cash flow pressures while capturing value through long-term leasing,” said Mohit Yadav, founder of business intelligence firm AltInfo. He added, “This is a continuation of the InvIT plan and focuses on smaller assets that couldn’t be included in the InvIT.” Reliance Retail did not comment on this report.
The report showed that the Rs 4,330 crore investment was made in two parts: Rs 4,000 crore through equity and Rs 330 crore through redeemable preference shares. After these investments, the debt, which includes unsecured loans from banks and the holding company, was Rs 73,602 crore as of July 2023. Earlier reports indicated Reliance Retail’s total debt was Rs 70,943 crore at the end of FY23, mainly due to its use of debt for expansion and business activities. RRVL operates India’s largest retail business in terms of sales, profit, and the number of stores through its subsidiaries and associates.
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