Reliance Industries Ltd (RIL) is planning to transfer all its consumer goods brands to a new wholly-owned subsidiary as Mukesh Ambani-led oil-to-telcom major is getting ready for an initial public offering for its retail business. A Bloomberg report maintained that Reliance Retail has approached the National Company Law Tribunal (NCLT) for an internal restructuring plan, wherein all its FMCG business will be moved to a new subsidiary, New Reliance Consumer Products Ltd (RCPL), which will be held directly under Reliance Industries.
New RCPL to anchor FMCG portfolio
Currently, the consumer goods business, spanning apparel, fashion, food, personal care and beverages, is spread across Reliance Retail Ltd, Reliance Retail Ventures Ltd, and Reliance Consumer Products Ltd.
“This is a large business by itself requiring specialised and focused attention, expertise and different skill sets as compared to retail business,” stated Reliance firms in their filing to the NCLT, the Bloomberg report maintained. The company also said that this business entails large capital investments and the move will attract a different set of investorsInvestor.
As per the NCLT filing, under the revised structure, New RCPL will be responsible for manufacturing, distributing, selling, and marketing consumer goods. Additionally, it will make investments in subsidiaries and joint ventures connected to this line of business.
RIL, the parent entity, holds 83.56 per cent in Reliance Retail Ventures, while other investors hold 16.44 per cent.
Reliance Retail’s Q4 performance
Earlier in April, RIL had released its fiscal fourth quarter earnings report with Reliance Retail Ventures posting a 29.1 per cent year-on-year growth in net profit at Rs 3,545 crore. This was led by a consumption uptick fuelled by local festivals, aggressive sale initiatives and weddings.
Gross revenue in Q4 grew 15.7 per cent on-year to Rs 88,620 crore, while net revenue grew 16.3 per cent YoY to Rs 78,622 crore.