The Hindu Business Line : Reliance says it's ready for retail

Organised retailing
Outlets will sell food, groceries, apparel and footwear, lifestyle and home improvement products, electronic goods and farm implements and inputs.
To also offer products and services in energy, travel, health and entertainment.
Partnerships would be developed to bring the best of global luxury brands.

HIS NEXT BIG IDEA: Mr Mukesh Ambani, Chairman, Reliance Industries, on his way to attend the company's AGM in Mumbai on Tuesday. — Paul Noronha

Mumbai , June 27

Reliance Industries Ltd will make an equity investment of up to Rs 10,000 crore, "over time," in a new company, Reliance Retail Ltd that will manage the group's new retail initiative.

The size of the equity investment is in view of "the overarching nature of this initiative," said Mr Mukesh Ambani, Chairman, RIL, at the company's AGM here on Tuesday.

The new company will spend more than Rs 25,000 crore in the years to come, he said, outlining Reliance's giant ambitions in organised retailing.

Reliance Retail Ltd (RRL) will be a wholly owned subsidiary of Reliance Industries, except for a holding in it through employee stock options.

Its retail outlets will sell food, groceries, apparel and footwear, lifestyle and home improvement products, electronic goods and farm implements and inputs. They will also offer products and services in energy, travel, health and entertainment. In addition to this, partnerships would be developed to bring the best of global luxury brands to India as well.

RRL's footprint will cover 1,500 Indian cities and towns and its outlets will be of a varied format, a mix of neighbourhood convenience stores, supermarkets, speciality stores and hypermarkets.

"Conceptually, Reliance is creating a virtuous circle of prosperity by bringing farmers, small shopkeepers and consumers in a win-win partnership," said Mr Ambani, who called this new business of Reliance's a "defining point in its history."

The retail business would partner with farmers, logistics operators, small shopkeepers and traders and enhance their purchasing power, he said.

A supply chain, logistics and information technology infrastructure would string the whole plan together. RRL will also develop linkages and opportunities in agriculture and food processing that would support the organised retailing business.

The new business would generate one million new jobs, said Mr Ambani. Already the initiative has 2,000 professionals on the job, their numbers would swell to 10,000 as it progresses. Over the next few years they will be joined by another five lakh, he added.

Organised retailing, along with the next generation distribution system, is at the core of the transformational initiative at Reliance, he said.

Noting that several sectors are on the threshold of expansive growth, Mr Ambani said Reliance would open up three broad fronts for itself: urban infrastructure and Special Economic Zones, and life science and healthcare. Reliance is also developing options for cross border acquisitions in existing and new businesses, he said.

The mega investment plan announced by RIL comes at a time when global retail majors are waiting in the wings to gain an Indian entry.

It would also bring a new level of competition to the existing players who do not have the financial strength of Reliance.

The RIL scrip rose by Rs 4.35 on BSE today, gaining 0.44 per cent over yesterday's close, to finish the trading day at Rs 985.55.

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