Reliance Retail, a subsidiary of Mukesh Ambani-led Reliance Industries Ltd, has been valued at $92-96 billion by two global consultants appointed by the company, said a report on Friday.
Reliance had appointed independent valuers EY, which valued the company at $96.14 billion, while BDO valued it at around $92 billion, a source with direct knowledge of the matter told Reuters.
Ernst & Young had valued the firm at Rs 884.03 per share, while BDO Valuation Advisory LLP has put the price of Rs 849.08 per share, reported PTI. Reliance Retail on Friday said it will reduce the equity share capital to the extent held by shareholders other than its promoter and holding company and announced a payout of Rs 1,362 per share.
Reliance Retail includes Ambani's core retail businesses, including digital and brick-and-mortar stores. Reliance Retail is fully owned by Reliance Retail Ventures, which also houses other retail operations such as international partnerships and the billionaire's consumer goods business.
The valuations show consultants are estimating Ambani's businesses are growing fast. In 2020, Reliance Retail Ventures raised Rs 47,265 crore ($5.72 billion) for a 10.09% stake in the company, valuing it at roughly $57 billion.
Reliance Retail has in recent years partnered with a slew of global brands to launch and expand their presence in India. From fashion to food, its partner brands include Burberry, Pret A Manger and Tiffany.
Reliance Retail on Friday said it will reduce the equity share capital to the extent held by shareholders other than its promoter and holding company.
The board of Reliance Retail, on July 4, 2023, approved the proposal in which shares held by such shareholders shall stand cancelled and extinguished as per the capital reduction plan.
''A consideration of Rs 1,362 per share, determined on the basis of valuation obtained from two reputed independent registered valuers, shall be paid towards the capital reduction,'' said an exchange filing by its parent firm Reliance Industries.
Also Read | Reliance Retail opts for reduction of share capital at Rs 1,362 per share
This capital reduction plan will make Reliance Retail a 100 per cent subsidiary of Reliance Retail Ventures Limited (RRVL) and through this, it will be able to more efficiently structure businesses.
RRVL, the promoter and the holding company of Reliance Retail, holds 99.91 per cent of the share capital of the company.
While 0.09 per cent, around 78.65 lakh equity shares, are held by the identified shareholders.
Reliance Retail will be sending a notice to its shareholders for this capital reduction.
However, it also added this capital reduction shall be subject to regulatory approvals and also by members of the company by way of special resolution and obtaining the sanction from the National Company Law Tribunal, Mumbai bench.
Presently Reliance Retail's equity shares are not listed, hence the valuation was determined by two independent registered valuers appointed by the company -- Ernst & Young Merchant Banking Services and BDO Valuation Advisory LLP.
With inputs from agencies
Also Read | Reliance Retail opts for reduction of share capital at Rs 1,362 per share