Reliance Retail Ventures Ltd, under Mukesh Ambani's leadership, plans to raise approximately Rs 3,048 crore through an infrastructure investment trust (InvIT), as per a draft document submitted to Sebi. The company, already having registered a trust with the market regulator, intends to utilize it to house the warehouse assets intended for monetization. A minimum of 25% of the trust's units will be retained by Reliance Retail, with the remaining portion open to incoming investors. The initiative aligns with the company's broader strategy of capitalizing on its warehousing and logistics assets, aiming to drive growth and innovation.
Reliance Retail Ventures Ltd, led by Mukesh Ambani's Reliance Industries Ltd, is pursuing a fund-raising initiative through an infrastructure investment trust (InvIT), according to a draft document submitted to the Securities and Exchange Board of India (Sebi). The retail arm has previously established a trust with Sebi to hold warehouse assets slated for monetization. The company aims to retain a minimum of 25% of the trust's units, with the remainder allocated to incoming investors.
Reliance Industries Ltd's retail arm, Reliance Retail Ventures Ltd, is strategically poised to leverage an Infrastructure Investment Trust (InvIT) to capitalize on its warehousing and logistics assets, as reported in April. The conglomerate established the Intelligent Supply Chain Infrastructure Trust to facilitate this initiative, marking its fourth InvIT venture after similar endeavours in its gas pipeline, Jio telecom, and fibre optic cable network sectors.
A substantial portion of the total issue proceeds, amounting to Rs 3,048 crore, will be allocated. Approximately Rs 100 crore will be directed towards acquiring equity shares of a specialized entity called a special purpose vehicle (SPV), formed to manage the warehousing assets. The bulk of the funds, around Rs 2,928 crore, will be utilized to extend a loan to the SPV, thereby facilitating the acquisition of warehousing and interconnected logistics assets.
The primary proposal revolves around the acquisition of 12.77 million square feet of warehouse space, accompanied by correlated logistics infrastructure, for an estimated value of Rs 4,261 crore. This robust portfolio encompasses 64 warehouses situated in pivotal warehousing markets, including Delhi NCR, Mumbai, Bengaluru, Chennai, Kolkata, Ahmedabad, Pune, and Hyderabad. Each warehouse boasts an area exceeding 100,000 square feet, with an investment surpassing Rs 25 crore per unit.
Notably, Reliance Retail Ventures is the parent entity of Reliance Retail, which has garnered recognition as the world's fastest-growing retailer. Recently, it marked a significant milestone by surpassing a billion transactions in the fiscal year 2023. The company's registered customer base stands at an impressive 249 million. During the same fiscal year, Reliance Retail's digital commerce and new commerce segments contributed a notable 18% to its revenue, reaching a substantial Rs 2.60 lakh crore.
The strategic integration of the InvIT structure to mobilize its warehousing and logistics prowess showcases Reliance Retail Ventures' commitment to innovative financial strategies. By repurposing its assets to raise capital, the company positions itself for expansion and continued excellence in the dynamic retail landscape.
As Reliance Retail Ventures balances its growth objectives with financial prudence, its pursuit of InvIT initiatives highlights its dedication to strategic development and seizing opportunities to maintain its position as a global leader in the retail industry.
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