Reliance Retail is rapidly advancing towards its listing on the stock market, taking significant steps in the process. Prior to the listing, the company is set to make a strategic decision: the merger of Reliance Brands with Reliance Retail.
Reliance Retail, India’s largest retail company, is now preparing to enter the stock market. However, before this, the company has taken a major and strategic step. Mukesh Ambani, Chairman of Reliance Industries, has decided to merge Reliance Brands Limited with its parent retail company. This move is being viewed as a crucial effort to strengthen and organize the company’s operations before its market entry.
What is Reliance Brands and Why is the Merger Taking Place?
Reliance Brands Limited was established in 2007. This company has already partnered with over 85 international luxury and lifestyle brands, including Burberry, Bottega Veneta, Tiffany & Co., and Pret A Manger, in India. Through these brands, Reliance has established a b presence in India’s high-end fashion and luxury segment.
Now, this brand unit is being merged with Reliance Retail. The objective is to reduce operational redundancies, improve coordination, and control costs. After the merger, Reliance Brands will operate as a division within Reliance Retail.
What Impact Will the Merger Have?
- Improved Transparency and Efficiency in Management: Following this merger, it will be possible to integrate properties, backend operations, staffing, and logistics systems. This will help the company gain better control over operations and reduce costs.
- Increased Brand Value Before IPO: Prior to the listing, this merger could make Reliance Retail even more attractive. An integrated brand portfolio will boost investor confidence.
- Stronger Foundation for Long-Term Strategy: Integrating the luxury and lifestyle segment can be considered as a strategic investment for the future, enabling Reliance Retail to firmly enter the global competitive landscape.
Reliance’s Listing Plans and Growing Strength
Reliance Retail’s listing is being considered one of the most significant events in the Indian stock market. In FY25, the company’s total revenue increased by 8% to ₹2.91 lakh crore, while profit increased by 12% to ₹12,392 crore. However, the company closed 2,155 stores, a decision taken with the objective of cost control and increasing profits.
Sales and Performance of Reliance Brands
Reliance Brands’ sales have also increased by 12% to ₹2,684 crore. However, the company’s loss in FY24 has also increased, although this includes financial information from all joint ventures and affiliated companies. Reliance Retail Ventures has several brands operating in different structures and are not publicly listed.
Will the Listing Change the Company’s Strategy?
Experts believe that Reliance should divide its retail business into separate units to allow each unit to operate more effectively according to its own strategy and logistics.
Govind Shrikhande, who was previously the CEO of Shoppers Stop, says: “If Reliance Retail is to travel a long distance, it should divide itself into segments for luxury, groceries, and fashion. The requirements and customer behavior in these three areas are quite different from each other.”
Mukesh Ambani’s Vision
Mukesh Ambani’s strategy is no longer limited to petroleum and telecommunications; it is now clear that he has plans for expansion in the retail sector as well. Considering India’s growing consumption and urbanization, Reliance Retail is rapidly expanding its network. This merger before the listing will not only enhance operational efficiency but also positively impact the company’s valuation.
