NEW DELHI: The board of Reliance Retail Ltd, a subsidiary of Reliance Industries Ltd (RIL), has approved a proposal to reduce the equity share capital held by shareholders other than its promoter and holding company.
The move, which will make Reliance Retail a 100 percent promoter-owned company, has sparked speculations about the company’s plans to float Initial Public Offering (IPO) in the coming months. According to analysts, this move will make it easy for the company to take decisions regarding any future restructuring, IPO, or mergers and acquisitions.
“According to our assumption approval of a proposal to reduce equity share capital could be a part of the company’s exercise of structuring of the business. Hence we assume that Reliance Industries as a part of its future strategy might have undertaken such an action,” a Mumbai-based analyst told this newspaper.
According to sources, Reliance Retail has been valued at $92-96 billion by two global consultants -- EY and BDO.
The company will pay `1,362 per share to the affected shareholders, said the company on Friday. The payout has been determined on the basis of valuation obtained from two independent registered valuers. Non-promoters have a small holding, less than 1% in the company.
“The board of directors of the company at its meeting held on July 4, 2023, has approved a proposal to reduce equity share capital to the extent held by shareholders other than its promoter and the holding company, namely, Reliance Retail Ventures,” the company said in a filing to the BSE.
Reliance Retail Ventures Ltd (RRVL) is the holding company of all the retail companies under the RIL Group. RIL holds 85.06% of the subscribed equity shares of RRVL, which in turn has 99.91% of the subscribed equity shares of Reliance Retail. Non-promoters hold 0.09%, nearly 78.65 lakh equity shares. After the equity reduction, the shares held by the shareholders will stand cancelled.