Ambant's Reliance plans $2 billion asset-backed securities deal

Ambant's Reliance plans $2 billion asset-backed securities deal

Reliance Retail, the retail arm of Reliance Industries Ltd (RIL), is planning to raise $2 billion through an asset-backed securities deal. The company aims to leverage its strong balance sheet and robust cash flows to issue the securities, which will be backed by its extensive store network and digital assets. The move is part of Reliance's broader strategy to expand its offline, online, and B2B channels and accelerate growth in the retail sector.

According to Isha Ambani, the director of Reliance Retail, the company is confident of delivering a compound annual growth rate (CAGR) of over 20% in revenue over the next three years. This ambitious target is anchored in the company's proven growth engines, including its offline, online, and B2B channels, which are already profitable at scale and primed for acceleration. Reliance Retail added 2,659 new stores in the previous financial year, taking its total to 19,340, and aims to expand by 2,000-3,000 stores annually.

The company's online channel currently contributes a high single-digit share to the retail revenue but aims to increase this to 20% within three years. Reliance Retail also leads in hyperlocal quick commerce (qcom), using its incomparable store network and deep consumer data to offer faster, more reliable deliveries than any competitor. The company processed around 1.4 billion transactions in the year (FY25), a scale that reinforces its ability to grow profitably.

The $2 billion asset-backed securities deal is expected to provide Reliance Retail with additional capital to support its expansion plans. The company's tech-led capabilities, including AI-driven demand forecasting and robotics-enabled warehouses, will also be leveraged to drive growth. Reliance Retail's market reach, supported by a tech-enabled supply chain, enables 10-minute qcom in metros and scheduled deliveries in remote villages. The company's network of 4.2 million merchants includes kirana traders and HoReCa businesses through its B2B forms like Metro and JioMart Digital.

Mukesh Ambani, the chairman and managing director (CMD) of RIL, has expressed confidence in the company's ability to grow multifold in the coming years. He has also highlighted the potential of Reliance Consumer Products Limited (RCPL), the FMCG arm of the Reliance group, to become a big new value-creating engine for the Reliance group, comparable to its retail business in size and profitability.

Reference(s):
[1] https://www.business-standard.com/companies/news/reliance-retail-confident-of-20-revenue-cagr-over-3-years-isha-ambani-125082901202_1.html