Reliance Retail is worth $112bn; twice as RIL's O2C business
What's the story
Reliance Retail, the retail subsidiary of Reliance Industries, is now valued at a whopping $112 billion, nearly double the valuation of its oil-to-chemical (O2C) division, as reported by Bernstein. The conglomerate's O2C division is valued at $57 billion. The report also valued JioMart Platforms, the company's e-commerce segment, at $77 billion, and the budding renewable energy business at $17 billion.
Details
Reliance Retail will drive the conglomerate's growth
Reliance Industries has been unlocking value across its diverse segments. The company recently bought out minority shareholders in Reliance Retail through a share buyback. Additionally, a new investor is expected to acquire a 1% stake in the retail arm at a $100 billion valuation. Bernstein predicts Reliance's EBITDA rise will be primarily driven by growth in digital retail and new energy.
What Next?
Reliance Retail's EBITDA contribution will reach 17%
Bernstein estimates that Reliance Retail's expenditure will reach Rs. 18,900 crore by FY27, accounting for about 19% of Reliance Industries' total capital expenditure. Its EBITDA contribution will reach 17% by FY27, increasing at a 21% compound annual growth rate (CAGR). The retail sector's EBITDA margin is also expected to grow from 7% in FY23 to 8.5% in FY27.