MUMBAI: Shares of Reliance Industries Ltd rose 2.7% after the conglomerate announced that subsidiary Reliance Retail Ventures will acquire the retail and wholesale business, as well as logistics and warehousing activities of Future Group for ₹24,713 crore.
At 12:50 p.m., Reliance Industries (RIL) share traded ₹2,135 each, up 0.9% from its previous close, while the benchmark Sensex was down 0.6% to 39,229.32.
The acquisition of the Future Group’s retail, wholesale and supply chain businesses is a strong strategic fit for Reliance’s retail business and will help it help millions of small traders increase their competitiveness and improve their income in these difficult times.
The composition of Future Group’s portfolio in clothing, general merchandise and own brands of consumer goods will allow a wider offering to its customers and the acquisition will be subject to the approval of various regulators, shareholders and creditors, a declared RIL.
Analysts at Angel Broking said in a note, “… We believe this acquisition by Reliance Industries Ltd. will help the company further consolidate its position in the retail industry and make it the clear leader in the retail industry. retail. We remain positive on Reliance. industries Ltd. and have a buy rating on the stock with a target of ₹2.366. “
As part of the agreement, Future Group will first merge certain companies carrying out the aforementioned activities into Future Enterprises Limited (FEL).
Future Group’s retail and wholesale business will then be transferred to Reliance Retail and Fashion Lifestyle Limited (RRFLL), a wholly-owned subsidiary of RRVL.
The logistics and warehousing business will be transferred directly to RRVL.
RRVL is a subsidiary of RIL, carrying out supply chain and retail activities through its subsidiaries.
Isha Ambani, Director of Reliance Retail Ventures, said: “The company hopes to continue the growth momentum of the retail industry with a unique model of active collaboration with small traders and kiranas as well as major consumer brands. “
RIL is the largest private sector company in India, with activities spanning hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, retail, and digital services.