Reliance Retail Ventures Seeks Rs 3,048 Crore Funding For Warehouse InvIT

The Retail arm of Mukesh Ambani-led Reliance Industries is planning to capitalise on its warehousing and logistics assets through private placement

Reliance Retail Ventures Ltd., the retail arm of Reliance Industries Ltd., is planning to raise Rs 3,048 crore for an infrastructure investment trust (InvIT), according to the draft document filed by the firm with SEBI. The Retail arm of Mukesh Ambani-led Reliance Industries is planning to capitalise on its warehousing and logistics assets through private placement. 

The FMCG firm has established an Intelligent Supply Chain Infrastructure Trust to facilitate this endeavor, said a report by BQ Prime citing the draft documents. The report also said that following the allocation of units, the trust aims to utilise the raised funds to acquire equity shares of the warehouse special purpose vehicle (SPV) and extend a loan amounting to Rs 2,928 crore to the SPV for the procurement of logistics assets.

As per a Business Today report, the initial proposal entails the acquisition of a warehouse space spanning 12.77 million square feet along with associated logistics infrastructure, with a total value of Rs 4,261 crore.

The asset portfolio will encompass 64 warehouses strategically located in prominent warehousing hubs such as Delhi NCR, Mumbai, Bengaluru, Chennai, Kolkata, Ahmedabad, Pune, and Hyderabad, the report said. Each warehouse will occupy an area exceeding 100,000 square feet, requiring an investment surpassing Rs 25 crore per unit.

Reliance Retail Ventures is the parent company of Reliance Retail. Notably, Reliance Retail reported that its customer base has surged to 249 million in the latest annual report by Reliance Industries. In FY23, Reliance Retail's digital commerce and new commerce ventures contributed 18 per cent to its revenue, which reached Rs 2.60 lakh crore.

Reliance Retail stands as the main sponsor of the InvIT, with Axis Trustee Services Ltd. functioning as the appointed trustee. Handling the role of Investment Manager is Infinite India Investment Management Ltd., while Jio Infrastructure Management Services Ltd. has been appointed as the Project Manager for the Trust, as per the draft paper, said the BQ Prime report. 

Upon offer completion, the report said, the InvIT will attain complete ownership of the equity share capital of the Warehouse SPV. Ahead of the unit allocation, Reliance Retail Ventures will maintain ownership of at least 25 per cent of the InvIT following the offering. 

Back in April, the Economic Times reported that Reliance was strategising to capitalise on the warehousing and logistics assets of its retail segment through an Infrastructure Investment Trust (InvIT). This marks the fourth such InvIT, following the establishment of infrastructure trusts focused on the gas pipeline, Jio telecommunications, and fiber optic cable network segments.