A proposal: Reliance Retail shareholders to exchange their stock for RIL shares

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MUMBAI: Reliance Industries (RIL), India’s most valuable company, has proposed a scheme that will allow shareholders of the unlisted Reliance Retail to exchange their stock for RIL shares, with the swap valuing the retail business at double that of nearest rival D’Mart.

Under this proposed scheme, Reliance Retail shareholders will get one share of RIL in exchange for four shares of Reliance Retail, details of the arrangement uploaded on the RIL website showed. The swap ratio values the retail business at Rs 2.5 lakh crore.

The scheme will be applicable to Reliance Retail employees, who were allotted shares, or restricted stock units, under various employee stock option plans. This arrangement will help enhance liquidity as employees will own shares that can be traded on a stock exchange, said a company official.

Reliance Retail is an unlisted company. It is a subsidiary of RIL, and the proposed scheme will not alter the capital structure of any of the companies.

ET had earlier reported that Reliance Retail shares started trading in the unlisted market in June, between Rs 475 and Rs 500 apiece, fetching the retailing arm a business value of Rs 2.5 – 2.75 lakh crore. That’s slightly lower than ITC’s current valuation, and double the value of Avenue Supermarts, which runs the D’Mart chain.

RIL had said in August that it would list Reliance Retail on the stock exchanges by 2024. Reliance started the retail business in 2006 with a grocery store, and the company has since spent Rs 14,000 crore on the business. It has built a network of 10,644 stores across grocery, lifestyle, apparel and electronics formats, with 2,829 outlets opening in the previous financial year.

Last year, Reliance Retail logged net sales of Rs 1.3 lakh crore, with Ebitda (earnings before interest, taxes, depreciation and amortisation) at Rs 6,201 crore.

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