Mukesh Ambani-Led Reliance Retail Ventures Plans Rs 3,048 Crore InvIT To Monetise Its Warehouse And Logistics Assets

Mukesh Ambani's Reliance Retail Ventures Ltd, the retail arm of Reliance Industries Ltd, has filed a draft document with the Securities and Exchange Board of India indicating plans to raise approximately Rs 3,048 crore through an infrastructure investment trust (InvIT).

According to reports in April, Reliance is looking to monetise the warehousing and logistics assets of its retail business through an InvIT.

The group has established a trust called Intelligent Supply Chain Infrastructure Trust specifically for this purpose.

Reliance Retail had already registered a trust with the market regulator in February of this year, which will be utilised to store the warehouse assets that the group intends to monetise.

This latest InvIT by Reliance Retail is the fourth of its kind, following its infrastructure trusts in gas pipeline, Jio telecom, and fiber optic cable network.

The company plans to allocate Rs 100 crore of the total issue proceeds of Rs 3,048 crore to acquire the equity shares of a special purpose vehicle (SPV) specifically created to hold the warehousing assets, reports Business Today.

The amount of Rs 2,928 crore will be utilised to provide a loan to the SPV. This loan will be used for the acquisition of the warehousing and related logistics assets.

The proposed plan involves acquiring warehouse space of 12.77 million square feet and related logistics infrastructure. The total consideration for this acquisition is estimated to be Rs 4,261 crore.

The portfolio of assets will consist of 64 warehouses located in key warehousing markets, including Delhi NCR, Mumbai, Bengaluru, Chennai, Kolkata, Ahmedabad, Pune, and Hyderabad.

The warehouses will be larger than 100,000 square feet and will require an investment of over Rs 25 crore per unit.

Qatar Investments In The Retail Venture

Reliance Retail Ventures serves as the parent company of Reliance Retail. The retail giant has earned the title of the world's fastest-growing retailer and achieved over a billion transactions in FY23.

According to the latest annual report of Reliance Industries, the company's registered customer base has reached 249 million.

In FY23, Reliance Retail's digital commerce and new commerce divisions accounted for 18 per cent of its revenue, which amounted to Rs 2.60 lakh crore.

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. This comes as Gulf funds are increasing their bets on the Indian market that is growing at a fast pace.

As per Forbes report, Reliance Retail will receive an investment of 82.7 billion rupees ($1 billion) from QIA.

According to a release from QIA on Wednesday (23 August), the investment will be converted into a 0.99 per cent stake in unlisted Reliance Retail on a fully diluted basis, giving the Indian company a valuation of almost $100 billion.