A new 100 p.c. owned company Reliance Retail Ltd. will be floated
MUMBAI: Reliance Industries Chairman Mukesh Ambani on Tuesday unveiled a Rs. 25,000-crore ($5.60 billion) retail plan for the company.
Calling this an idea which has the potential to revolutionise the Indian socio-economic framework, he said "Conceptually, Reliance is creating a virtuous circle of prosperity by bringing farmers, small shopkeepers and consumers in a win- win partnership.'' He was speaking at the 32nd annual general meeting of the company, here.
"A new company, Reliance Retail Ltd. (RRL) will spearhead this revolution. Reliance Industries will have a 100 per cent stake in RRL, save for employee stock options," Reliance Industries stated in a press release.
Given the overarching nature of this initiative, RRL would entail an equity investment to the extent of Rs. 10,000 crore ($2.24 billion). It would have to expend more than Rs. 25,000 crore ($5.60 bilion) in the years to come. "Organised retailing is a new business initiative of Reliance that signifies a defining point in its history. This marks the full flowering of RIL's basic philosophy: share and prosper. With this new initiative, Reliance will forge strong and enduring bonds with millions of farmers and transform its relationship with consumers to a new level.
Organised Retailing, along with the next generation distribution system, is at the core of this transformational initiative. This idea evolves from the new paradigm in the consumption of products and services in India,'' said Mr. Ambani
Reliance Retail would build a business that would focus on "competitive offerings'' to Indian consumers across several verticals: Integrated food and grocery, items of daily household consumption, apparels and footwear, electronic goods, lifestyle products and services, home essentials and improvements, farm implements and inputs, distribution of energy products and services, distribution of travel and financial services, entertainment and leisure experiences, health and well-being products and services and educational products and services. It would develop partnerships to bring the best of luxury brands from all over the world to India and it would also develop linkages with opportunities in agriculture and food processing. The company would have a pan-India footprint covering 1,500 cities and towns and embracing all strata of the society.
Mr. Ambani also announced new crude oil discovery in the KG Basin. He said, "RIL recently had a crude oil discovery in the MA1 well in the deep water D6 Block in the Krishna-Godavari basin.''
He said, "as Reliance moves ahead, oil and gas exploration and production would undoubtedly be the highest value creating business. Testing in two zones, located three kilometres below the sea level, has shown significant presence of oil. The potential of this discovery is under evaluation.'' On the international front, Mr. Ambani said Reliance was building a portfolio of exploration acreages in known petroliferous regions, accrued through organic growth and strategic acquisitions.