| RIL chairman Mukesh Ambani with wife Nita in Mumbai on Tuesday. (PTI)
Mumbai, June 27: The organised retailing sector had better watch out: a juggernaut from the Reliance group is just about ready to roll.
Reliance Retail Ltd (RRL), an ambitious and aggressive venture headed by Mukesh D. Ambani, will invest Rs 25,000 crore over the next few years to spark a “revolution” that will focus on competitive offerings to Indian consumers across a host of verticals.
This initiative, which will have a pan-India presence, would not only possess formats ranging from neighbourhood convenience stores, supermarkets, speciality stores to hypermarkets but also have an array of domestic and international brands catering to both mass market and luxury segments. Reliance Industries Ltd (RIL), the oil and petrochemical behemoth, will have a 100 per cent stake in RRL, except for employee stock options.
Its equity contribution in the project will be to the extent of Rs 10,000 crore. Mukesh Ambani, chairman and managing director of RIL, unveiled various facets of the group’s long-awaited retail foray at the company’s annual general meeting held here today.
Ambani said RRL would also develop partnerships to bring the best of luxury brands from all over the world to India.
Reports suggest that his company is now in discussions with Giorgio Armani to bring two brands from the latter’s stable into the country.
Organised retail is not the only mega project that the group is pursuing. As against the conventional practice of implementing only one such project at a given point of time, RIL for the first time in its history, is following multiple initiatives.
Reliance Petroleum Ltd (RPL), in which RIL has a 75 per cent stake, is setting up a 29-million-tonne refinery at Jamnagar.
RIL is also betting big on oil exploration and production (E&P) even as huge special economic zones (SEZ) are on the anvil.
The impact of all these initiatives will be firmly reflected in fiscal 2009-10 on the company’s balance sheet, Ambani indicated to shareholders. He said, “Year 2009-10 will be significant. There will be a quantum jump in our performance.”
Some of the verticals that will be targeted by RRL include food and grocery, items of daily consumption like FMCG, apparels and footwear, consumer durables, lifestyle products and services, home essentials and improvements, farm implements and inputs, distribution of travel services, entertainment and leisure, health and well-being products and services apart from educational products and services.
The company’s portfolio includes distribution of energy products and services as well.
In his address, which was built round the theme ' Embarking on a Retail Revolution ' Ambani told shareholders that with its new initiative, the company would forge strong and enduring bonds with millions of farmers and transform its relationship with consumers to a new level.
The idea is to “create a virtuous circle” of prosperity by bringing farmers, small shopkeepers and consumers together, he added.
The RIL chief’s comment was well received by the stock markets which reacted by pulling up the RIL share price by Rs 4.35 to Rs 985.55.