A proposed share swap agreement for shareholders of Reliance Retail from parent Reliance Industries has valued the RIL's retail unit at Rs 2.4 lakh crore. As part of the scheme of arrangement, Reliance Retail's shareholders will get one share of RIL in exchange for every four shares of Reliance Retail, according to the agreement posted on the firm's website.
On Wednesday, RIL shares settled at Rs 1,515.95 apiece on the BSE, giving the Mukesh Ambani-owned company market capitalisation of Rs 9.6 lakh crore and thereby valuing Reliance Retail at Rs 2.4 lakh crore as per the agreement.
Reliance Retail is an unlisted subsidiary of Reliance Retail Ventures and an indirect subsidiary of oil-to-telecom conglomerate Reliance Industries. Reliance Retail Ventures holds 99.95 percent of Reliance Retail, while the rest is with employees.
Reliance Retail's valuation is double than that of Avenue Supermarts, reported PTI.
Reliance Retail in the agreement said it had given employees stock options in 2006 and 2007, under which restricted stock units were allotted to eligible employees. "On exercise of the RSUs by some of the employees, Equity Shares have been allotted to them,” RIL said.
"The company has been receiving requests from the employees holding equity shares for providing them options for exit and liquidity, including by way of a listing of the equity shares," it said. However, Reliance Retail said that it does not have any plan for the listing of its equity shares on the stock exchanges.
In August, RIL had said that it may list Reliance Retail on the stock exchanges in the next five years.
The company said pursuant to the December 17 order of the Mumbai-bench of the National Company Law Tribunal, a meeting of the equity shareholders of Reliance Retail Ltd is being convened on January 23 for approving the Scheme of Arrangement.
Reliance Retail had reported net sales of Rs 1.3 lakh crore in 2018 and has a network of 10,901 stores. In the July-September 2019 quarter ending September 30, Reliance Retail reported a 27 percent growth in revenues to Rs 41,202 crore with strong growth across formats. Operating profit grew 66.8 percent to Rs 2,322 crore. It has 24.5 million square feet of retail store area under operation.
(With inputs from PTI)
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First Published: IST