Bernstein pegs RIL’s stake in retail arm at $111 billion


Global investment management firm Bernstein has pegged the enterprise valuation of Reliance Industries (RIL)’s 85 per cent stake in Reliance Retail at $111 billion, while valuing the Mukesh Ambani-led company’s 66.5 per cent stake in telecom and digital platform arm Reliance Jio at $88 billion.

Photograph: Amit Dave/Reuters

Reliance Industries had earlier planned to list both its subsidiaries to unlock value for its shareholders but hadn’t fixed any timeline.

The report said that Reliance Retail had raised $6 billion by diluting a 10.1 per cent stake, while Jio Platforms raised $20 billion from investors by selling 33 per cent in 2020.


Most of the investors in Reliance Retail, except Singapore-based sovereign wealth fund GIC, had also invested in Jio Platforms.

Expecting a sharp rise in India’s economic growth story, the report said that since 2015, RIL had built a sprawling retail business with Reliance Retail setting up 18,000 store nationwide, with a gross merchandise value (GMV) of $30 billion; a dominant 4G network in the form of Reliance Jio, which has 430 million subscribers; and a strong digital media platform that now offers OTT, IPL, music streaming, and news through strategic acquisitions.

“This makes RIL the only Indian player to have an integrated (offline/ online) offering, and the ability to compete with global tech giants (Amazon, Walmart).

“All the global giants are present in the Indian market, either through organic set-ups (Amazon, Google, Facebook, Netflix and Apple) or investments/acquisitions (Walmart).

“They have been successful in digital advertising (Google and Facebook),” it said.

However, the report said that the largest opportunity lied in e-commerce and entertainment where winners would be determined by the most compelling integrated-value proposition.

Currently, only Reliance (Jio/ Reliance Retail) and Amazon have such a platform and stand to benefit, the report said.

On the rise of e-commerce, the report said India was one of the few large and under-penetrated e-commerce markets expected to reach $150 billion in GMV by 2025, with online penetration doubling in the next 5 years.

Flipkart ($23 billion GMV) and Amazon ($18-20 billon GMV) lead with over 60 per cent market share.

Reliance is number three ($5.7 billion e-com sales), driven by “attractive” categories of fashion (Ajio) and JioMart (e-grocery).

E-tailer Meesho’s GMV has been estimated at $5 billion.

All three players, the report said, are focused on scale, customer loyalty, and profitability.

“We believe Reliance Retail/Jio is the best positioned player in the largest and fastest growing e-commerce market.

“The advantages of its retail network, mobile network, digital ecosystem, and “home-field advantage” in a famously complex regulatory and operating environment mean [that] in the long term, it will likely claim the lion’s share of the $150-billion e-commerce marketplace,” the report said.

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