Mukesh Ambani-led Reliance Industries Ltd on Friday announced that board of directors of Reliance Retail have approved a proposal to reduce the equity share capital of RIL’s retail unit.
Payout will be Rs 1,362 per share, said RIL in a stock exchange filing.
Reliance Retail said shares held by shareholders other than promoter, holding company “shall stand cancelled and extinguished”.
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“The Board of Directors of the Company at its meeting held on July 4, 2023 has approved a proposal to reduce the equity share capital to the extent held by shareholders other than its Promoter and holding company, namely, Reliance Retail Ventures Limited. Upon such reduction, these shares held by such shareholders shall stand cancelled and extinguished,” stated the exchange filing.
RRVL, the promoter and the holding company of Reliance Retail, holds 99.91% of the share capital of the company.
While 0.09%, around 78.65 lakh equity shares, are held by the identified shareholders.
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However, it also added this capital reduction shall be subject to regulatory approvals and also by members of the company by way of special resolution and obtaining the sanction from the National Company Law Tribunal, Mumbai bench. Reliance Retail will be sending a notice to its shareholders for this capital reduction.
Presently, Reliance Retail’s equity shares are not listed, hence the valuation was determined by two independent registered valuers appointed by the company — Ernst & Young Merchant Banking Services and BDO Valuation Advisory LLP.
Ernst & Young had valued the firm at Rs 884.03 per share, while BDO Valuation Advisory LLP has put the price of Rs 849.08 per share, reported PTI.
Reduction of share capital refers to the process by which a company reduces the amount of its share capital by cancelling or extinguishing any part of it that is not required by the company.
Reliance Retail has been valued at $92-96 billion by two global consultants appointed by the company, reported Reuters on Friday.
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Reliance had appointed independent valuers EY, which valued the company at $96.14 billion, while BDO valued it at around $92 billion, a source with direct knowledge of the matter told Reuters.
Reliance Retail includes Ambani’s core retail businesses, including digital and brick-and-mortar stores. Reliance Retail is fully owned by Reliance Retail Ventures, which also houses other retail operations such as international partnerships and the billionaire’s consumer goods business.
The valuations show consultants are estimating Ambani’s businesses are growing fast. In 2020, Reliance Retail Ventures raised Rs 47,265 crore ($5.72 billion) for a 10.09% stake in the company, valuing it at roughly $57 billion.
