A minimum of 25% of the trust’s units will be held by Reliance Retail, with the remaining units being distributed to new investors.
Reliance Retail Ventures Ltd., the retail division of Reliance Industries Ltd. and helmed by Mukesh Ambani, plans to raise around Rs. 3,048 crore through an infrastructure investment trust (InvIT), according to a draft document the company filed with the Sebi.
Reliance Retail registered a trust in February of this year with the market regulator. The group’s planned monetization of the warehouse assets will be held in the trust.
Reliance Retail intends to keep a minimum of 25% of the trust’s units, according to the document, and the remaining units will be distributed to new investors.
It was reported in April that Reliance intended to use an InvIT to monetize the warehouse and logistics assets of its retail division. According to the Economic Times, the firm has established the Intelligent Supply Chain Infrastructure Trust as a trust specifically for this purpose.
After infrastructure trusts in Jio telecom, gas pipeline, and fiber optic cable network, this is the fourth InvIT.
According to the company’s latest statement, of the $3,048 billion in total issuance proceeds, almost $100 billion will be utilized to buy equity shares in a special purpose vehicle (SPV) established to hold the warehousing assets. To give the SPV a loan for the purchase of the warehouse and associated logistics assets, about Rs 2,928 crore will be required.
For a price of Rs 4,261 crore, the initial idea is to buy 12.77 million square feet of warehouse space along with the necessary logistics infrastructure.
64 warehouses in important warehousing markets including Delhi NCR, Mumbai, Bengaluru, Chennai, Kolkata, Ahmedabad, Pune, and Hyderabad would be included in the portfolio of assets. The warehouses would each be more than 25 crore rupees in value and more than 100,000 square feet in size.
The holding company for Reliance Retail is called Reliance Retail Ventures. Reliance Retail reached the landmark of one billion transactions in FY23, making it the retailer with the fastest global growth.
According to Reliance Industries’ most recent annual report, their base of registered customers has reached 249 million. Reliance Retail generated Rs 2.60 lakh crore in revenue in FY23, of which 18% came from its digital and new commerce sectors.
In order to expand its operations in the consumer products and FMCG areas, it has also lately purchased a number of companies. The Campa brand has recently been resurrected, joining the cola market. In December of last year, Reliance Consumer Products, an FMCG company funded by RRVL, introduced the “Independence” line of consumer packaged goods.
Reliance Retail Ventures, the retail division of Reliance Industries led by Mukesh Ambani, was the subject of reports that the Qatar Investment Authority (QIA) was in talks to acquire a stake. This occurs as Gulf funds increase their wagers on the rapidly expanding Indian market.
QIA is reportedly considering purchasing a minority position in Reliance Retail Ventures, according to a Financial Times report.
According to the article, which included insider sources, the investment will probably total $1 billion, or 1% of the company. This gives the company a $100 billion market worth.
The Public Investment Fund of Saudi Arabia invested $1.3 billion in Reliance Retail in 2020, acquiring a 2.04% stake. The report also stated that the company’s valuation at the time was $62.4 billion. KKR and two sovereign investment funds from Abu Dhabi are also shareholders in the business.
