Mumbai: Mukesh Ambani-led Reliance Industries Limited (RIL) has offered the shareholders of its subsidiary and unlisted unit Reliance Retail to swap their units with RIL shares.
As per the proposed arrangement, Reliance Retail shareholders will get one share of RIL against four Reliance Retail shares. Reliance Retail shares are not listed on any stock exchanges.
"The company had implemented two schemes namely Reliance Retail Employees’ Restricted Stock Unit Plan 2006 and 2007 under which Restricted Stock Units (“RSUs") have been allotted to eligible employees. On exercise of the RSUs by some of the employees, equity shares have been allotted to them," RIL said on its website.
RIL added it has received requests from Reliance Retail employees holding equity shares for providing them options to exit and liquidate their holdings, including by way of a listing of the equity shares.
The swap ratio values RIL's retail business at around ₹2.5 lakh crore. At 1100 am, RIL shares were trading flat at ₹1546.50 apiece this morning.
"This scheme enables the specified shareholders to continue to participate in the growth of the retail business (the business of the company), as hitherto since the company is an indirect subsidiary of Reliance Industries," RIL said.
"Since, the scheme does not contemplate any outflow of funds/assets of the Company, the aggregate of ‘equity and other equity’ of the company pre and post-implementation of the scheme will remain the same and unaltered," RIL added.
Though Reliance Retail on its website says it does not have any plan for a listing of its equity shares on the stock exchanges, Mukesh Ambani, chairman and managing director of RIL had last August said that Reliance Retail would be listed by 2024.
Reliance Retail has emerged as India‘s largest retailer, driven by strong growth in fashion and consumer electronics. Analysts say RIL's online commerce segment could accelerate growth for the company. The company has been planning a new commerce venture, an offline-to-online initiative to take on rivals like Amazon and Walmart-owned Flipkart, which would link producers, traders, small merchants, brands and consumers through technology. It has been working on its new commerce plan for nearly two years. Currently, it operates neighbourhood stores, supermarkets, hypermarkets, wholesale, speciality, and online stores.
Reliance Retail has grown its revenue by 38% over the last five years and acquired 13% of organized retail market share.