Reliance Retail Ventures Limited (RRVL), a subsidiary of Reliance Industries Ltd, inked definitive agreements on Thursday to buy a 100% equity investment in Metro Cash and Carry India Pvt Ltd, which operates under the ‘Metro India’ brand, for Rs 2,850 crore in cash.
According to a joint release, Reliance Retail Ventures Limited (RRVL), a subsidiary of Reliance Industries Ltd, inked definitive agreements today to acquire a 100% equity investment in Metro Cash & Carry India for Rs 2,850 crore, subject to closing adjustments.
Reliance Retail will get access to a network of Metro India stores in prime locations throughout key cities. Also, a significant base of registered kiranas and other institutional clients and a strong supplier network. The acquisition is subject to regulatory and other normal closing conditions. It is scheduled to close by March 2023, according to the company.
Metro India is a prominent player in the Indian B2B industry. It is a solid multi-channel platform that provides an excellent customer experience. With over 16,600 outlets, Reliance is India’s largest brick-and-mortar retailer, and a robust wholesale unit would strengthen its operations in India.
Further in 34 countries, Metro is a renowned international wholesale and food retail specialist. According to its website, Metro Cash & Carry, its wholesale division, entered India in 2003 and today has 31 wholesale distribution centers across the country, serving only business customers.
It provides fruits and vegetables, general foods, electronics, household goods, and clothing to clients such as hotels and restaurants, as well as offices and businesses, small shops, and Kirana stores.
With USD 18 billion in revenue, Reliance Retail, the oil-to-telecom conglomerate’s retail arm, is rated 56th among the top worldwide retailers. Further, it is the world’s second-fastest-growing retail company, trailing only Coupang in South Korea. Also, food and grocery account for 60% of the Indian retail market, at Rs 60 lakh crore.
Reliance already has a 20% market share in the organized food and grocery business. Further, it has nearly trebled the number of stores as its nearest competitor ‘More’ in the segment. It entered FMCG this month with the introduction of the brand ‘Independence’ for staples, processed foods, beverages, and other daily necessities. It is competing with ITC, Tata Consumer Products Ltd, Patanjali, and Adani Wilmar.
While Flipkart Group has purchased a 100% share in Walmart India Pvt Ltd, which operates the Best Price cash-and-carry business. Retailers such as Siam Makro, which operates the Lots Wholesale cash and carry trade company under the brand name LOTS Wholesale Solutions, were also interested in acquiring the Metro Cash & Carry business.
Metro has six wholesale distribution centers in Bangalore, four in Hyderabad, two in Mumbai and Delhi, and one in Jaipur, Jalandhar, Zirakpur, Amritsar, Ahmedabad, Surat, Indore, Lucknow, Meerut, Nasik, Ghaziabad, Tumakuru, Vijayawada, Visakhapatnam, Guntur, and Hubballi.
Reliance Retail is a subsidiary of RRVL, the holding company for all RIL retail companies. For the fiscal year that ended March 31, 2022, RRVL reported a consolidated turnover of roughly Rs 2 lakh crore. Previously, in August 2020, Reliance announced a Rs 24,713-crore deal to acquire Kishore Biyani’s Future group’s retail operations. The transaction involved the acquisition of 19 Future group companies involved in retail, wholesale, logistics, and warehousing.
Further, Reliance Industries pulled off the acquisition in April of this year after failing to secure lender support. Reliance Industries stock price rose on December 22 after the firm announced the acquisition. RIL began trading on the NSE at Rs 2598, up from the previous close of Rs 2584. The company has an 11 percent weightage in the Nifty 50. It has risen more than 7% so far in 2022.
With the help of this acquisition, Reliance Retail will continue to expand its reach across the country. It will be serving the whole spectrum of Indian society. It includes households and kiranas to merchants, and from hotels, restaurants, and catering to small and medium companies and organizations.
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