Shares of Mukesh Ambani-led Reliance Retail are trading at a 33% premium or at ₹500 a share in the unlisted market compared to the value of ₹375 a share arrived at by the swap ratio announced by parent Reliance Industries Ltd. for its retail arm.
On December 25, RIL proposed a swap ratio of 4:1, which implied investors could get one share of RIL for every four shares held in Reliance Retail, valuing the retail business at ₹2.4 lakh crore then.
At the current asking price of ₹500 for one Reliance Retail share in the unlisted market, the retail arm of RIL is valued at ₹3,16,904 crore, or about one-third of the total valuation of the company. “The premium that Reliance Retail is quoting in the unlisted market defies logic as its own promoters have valued it at around one-fourth of RIL’s total valuation. However, there is great demand for Reliance Retail shares and there is no seller for it even at ₹500 a share,” Sandip Ginodia of Abhishek Securities, which deals in shares in the unofficial market for unlisted stocks told The Hindu .
Reliance Retail shares were trading at peak of ₹900 a share in the unlisted market before the swap ratio was announced by parent RIL.
India’s largest organised listed retailer, Avenue Supermarts, which owns and operates D-Mart stores is valued at ₹1,13,950.50 crore based on Tuesday’s closing price of ₹1,815.15. RIL holds 99.95% in Reliance Retail and about 35 lakh equity shares circulate in the unlisted market.
Last week, RIL launched e-commerce arm Jio Mart for grocery deliveries, in which segment global e-tailers such as Amazon and Flipkart compete.
