Mukesh Ambani’s Reliance Retail Ventures looking to raise Rs 3,048 cr for warehouse InvIT

Mukesh Ambani-led Reliance Retail Ventures Ltd, the retail arm of Reliance Industries Ltd, is planning to raise around Rs 3,048 crore through an infrastructure investment trust (InvIT), a draft document filed with the Sebi by the company showed.

Reliance Retail has already registered a trust with the market regulator in February this year. The trust will store the warehouse assets that the group intends to monetise.

As per the document, Reliance Retail is planning to hold a minimum of 25 per cent units of the trust, and the rest will be given away to incoming investors.

In April, it was reported that Reliance is planning to monetise the warehousing and logistics assets of its retail business by an InvIT. The group had set up a trust under the name of Intelligent Supply Chain Infrastructure Trust for this purpose, the Economic Times reported.

This is the fourth InvIT after its infrastructure trusts in gas pipeline, Jio telecom, and fibre optic cable network.

The company has now stated that of the total issue proceeds of Rs 3,048 crore, around Rs100 crore will be used to acquire the equity shares of a special purpose vehicle (SPV) created to hold the warehousing assets. Around Rs 2,928 crore will be used to provide a loan to the SPV for the acquisition of the warehousing and related logistics assets.

The initial proposal is to acquire warehouse space of 12.77 million square feet and related logistics infrastructure for a consideration of Rs 4,261 crore.

The portfolio of assets will comprise 64 warehouses in key warehousing markets, such as Delhi NCR, Mumbai, Bengaluru, Chennai, Kolkata, Ahmedabad, Pune, and Hyderabad. The warehouses will have an area of more than 100,000 square foot and an investment of more than Rs25 crore per unit.

Reliance Retail Ventures is the holding company of Reliance Retail. Reliance Retail has been ranked as the fastest-growing retailer in the world and crossed the milestone of a billion transactions in FY23.

Its registered customer base reached 249 million, said the latest annual report of Reliance Industries. In FY23, Reliance Retail's digital commerce and new commerce businesses contributed to 18 per cent of its revenue, which stood at Rs 2.60 lakh crore.

It has also acquired several companies recently to scale its business in consumer goods and FMCG segments. It has recently relaunched the Campa brand entering into the cola business. RRVL-backed FMCG firm Reliance Consumer Products also launched its consumer-packaged goods brand 'Independence' in December last year.

In July, it was reported that Qatar Investment Authority (QIA) is in talks to buy a stake in Mukesh Ambani-helmed Reliance Industries’ retail unit, Reliance Retail Ventures. This comes as Gulf funds are increasing their bets on the Indian market that is growing at a fast pace.

According to a report in Financial Times, QIA is considering picking a minority stake in Reliance Retail Ventures. The report that cited sources in the know, added that the investment will be likely to the tune of $1 billion, amounting to a stake of 1 per cent. This values the business at $100 billion.

Reliance Retail, in 2020, saw investments of $1.3 billion by Saudi Arabia’s Public Investment Fund for a stake of 2.04 per cent. The company was then valued at $62.4 billion, the report added. KKR and two Abu Dhabi sovereign investment funds also are among the company’s shareholders.

(With PTI inputs)

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