Reliance Industries, the country's largest company by market value has started the process of setting up an infrastructure investment trust (InvIT), under which the group can monetise the backend warehousing and logistics assets of its retail business, PTI reported, quoting sources.
Reliance Retail, the company that operates the retail business of the billionaire Mukesh Ambani-led Reliance Industries, has already registered a trust with the market regulator Securities and Exchange Board of India (Sebi) in February this year, they added.
The trust will store the warehouse assets that the group intends to monetise.
According to a media reports, the value of the assets that could be transferred to the InvIT is $2.4–3 billion ( ₹19,000–25,000 crore). More assets are likely to get added as they become operational, it added.
Reliance Industries operates across four major business verticals, namely O2C, Retail, Digital Services, and New Energy. O2C comprises the company's oil refineries, petrochemical plants, and fuel retailing operations. Retail encompasses both brick-and-mortar stores and e-commerce channels. The digital services vertical incorporates the company's telecom arm, Jio. The fourth vertical of Reliance Industries is new energy.
Reliance Retail, which is aggressively expanding its presence across channels, is investing in backend infrastructure such as warehousing, supply chain, logistics infrastructure, and facilities, the report said.
At its recent annual general meeting (AGM), management shared its vision to triple its retail business over the next 3-5 years, banking on a wider reach, an enhanced product range, and deeper online penetration.
Its total warehouse and fulfilment space was at 33.6 million square feet at the end of December 31, 2022. It has grown threefold from 10.6 million square feet in Q3 FY20.
At the end of 3QFY23, the total number of stores had expanded significantly to 17,225 from 3,616 in FY17, while the total area had also grown substantially to 60.2 million square feet from 13.5 million square feet in FY17, the report added.
Reliance Retail has been ranked as the fastest-growing retailer in the world and has reported a turnover of ₹1.99 lakh crore for the financial year 2020–21.
Reliance Industries has been expanding its presence in the consumer goods and FMCG segments through multiple acquisitions. It has entered the cola business by relaunching the Campa brand. In December last year, Reliance Consumer Products, backed by RRVL, also launched its own consumer packaged goods brand called 'Independence'.
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