Mukesh Ambani's Reliance Retail Ventures is reportedly in advanced talks with global investors to raise around $2.5 billion by the end September, ahead of its stock market listing, a Reuters report said on Friday.
The report said the target fundraise of $2.5 billion is part of a combined $3.5 billion target the firm has set for itself. Of this, $1 billion will come from Qatar Investment Authority (QIA).
In August, Reliance said it raised $1 billion from QIA at a $100 billion valuation for the biggest retailer whose operations stretch from selling groceries to electronics, and include foreign partnerships with brands like Metro, Campa Cola, GAP, Pret A Manger, Lotus, Sosyo, Maliban, and Toffeeman among others.
QIA will be investing a sum of Rs 8,278 crore in the company for a 0.99 percent stake. This would rank Reliance Retail among the top four companies by total equity value in the country.
On Monday, RIL Chairman Mukesh Ambani said that several marquee global strategic and financial investors have shown strong interest in Reliance Retail, including QIA.
He had added that if it were listed on stock exchanges based on current valuation, the retail venture would be among the top four listed entities.
In 2020, Reliance Retail raised $5.71 billion by selling a 10.09 per cent stake to investors including KKR, the Saudi Public Investment Fund, General Atlantic, and the United Arab Emirates' Mubadala.
Reliance, though, has not confirmed the news. In an email to Reuters, the conglomerate said: "As a policy, we do not comment on media speculation and rumours.", but added "Our company evaluates various opportunities on an ongoing basis."
At the company's 46th Annual General meeting on August 28, Mukesh Ambani said that Reliance Retail will emerge as the group’s most rapidly expanding business.
Ambani said this rapid growth in retail business will be fueled as Indians get more affluent, the company opens more stores and makes shopping easier on mobile and digital devices. “I am confident that as India grows from a $2,500 per-capita economy to a $10,000 per-capita economy, Reliance Retail will be our fastest growing business in revenues and EBITDA,” Mukesh Ambani said at the AGM.
It is to be noted that in the last five years (FY19-23), Reliance Retail segment EBITDA grew at 30.53 per cent per year. In comparison, India’s per capita income has grown at a CAGR of 5.23 per cent in the last 10 years.
The Reliance is trying to ride on the rise in income. RIL has been opening new stores and also made its presence online with Ajio and Tira. The retail business expanded its network with over 3,300 new stores during the financial year 2023, taking the store tally to 18,040 stores pan-India.
During the 2022-23 fiscal, Reliance Retail registered a footfall of 780 million, which led to its customer base growing to 249 million during the year.
Analysts have also said Reliance Retail’s decision to market Campa Cola in Asian and African markets would further help in company to grow. On the other hand, the company’s move to launch JioMart on WhatsApp in FY22 has led to growth of JioMart customers on the platform.
Reliance Retail reported revenue of Rs 260,364 crore in FY23, a 30 per cent jump over the previous fiscal. Its Ebitda stood at Rs 17,928 crore, while its net profit was Rs 9,181 crore in the same period.
Digital sales from platforms such Ajio.com, JioMart and others, contributed Rs50,000 crore — roughly 20 per cent of total revenues.
