Reliance Retail Gets Massive ₹14,839 Crore Boost from Parent Company for Expansion Plans

Reliance Industries has given ₹14,839 crore to Reliance Retail as a loan in the last financial year to help the retail giant grow and expand its reach into smaller towns and test new store formats. This is the largest amount the parent company has provided in the past decade.

The funding was given as an inter-corporate deposit from Reliance Retail Ventures, the holding company for Reliance’s retail business. In total, the parent company invested around ₹19,170 crore in Reliance Retail last year, including ₹4,330 crore in equity.

Reliance Retail also paid off a significant portion of its bank loans, which some analysts believe is part of preparing for a possible initial public offering (IPO). However, Reliance has not yet officially announced any IPO plans.

In its FY24 report, the company mentioned that it invested in improving its supply-chain infrastructure and omni-channel capabilities. It also introduced new store formats, such as the value retail chain Yousta and handicraft stores under the Swadesh brand.

While Reliance Retail currently relies on its parent company’s financing, it will be important to see how this financial strategy changes if the company decides to go public in the future.

Last year, Reliance Retail paid back ₹8,019 crore in long-term bank loans, reducing its non-current borrowings by 30% to ₹13,382 crore. However, its overall debt increased from ₹70,944 crore in FY23 to ₹81,060 crore in FY24 due to the new funding from its parent company.