Mukesh Ambani, the owner of Reliance Industries Limited, has a Midas touch. Anything that he touches, is converted to gold. In a recent development, Reliance Retail has crossed the $100 billion market cap in few years. The firm is a subsidiary of Reliance Group.
The retail startup’s unlisted shares saw a 300% jump since January 2020. In 2020, Reliance Retail sold its around 10% stake to raise Rs 47265 crore from private equity funds worldwide.
How Did Reliance Retail Touch $100 Billion Market Cap?
Reliance Retail has shown exponential growth in the last 15 months. As per the latest reports, the firm has crossed the magical $100 billion valuation mark. It is the fourth Indian firm that has surpassed a $100 billion valuation.
The startup deals in retail sales. Mukesh Ambani-led Reliance Retail has a chain of retail stores in India to sell most of the household items including grocery and electronics. The startup is also competing with global goods maker through its manufacturing service.
As per the Economic Times report, the company’s unlisted share is trading between Rs 1,500 and Rs 1,550. The report also confirmed that it is a threefold jump in its share compared to the share value of about Rs 500 in Jan 2020. If we calculate the market cap of Reliance Retail with a share value of Rs 1,500, it crosses Rs 7.50 lakh crore.
In 2020, the retail startup swapped its share with other Reliance firms. Not only that, but the company also sold its 10.09% stake to raise Rs 47265 crore from global private equity funds.
Recent Growth and Experts’ View about Reliance Retail
In a discussion with Business Daily, Sambhav Aggarwal of Arms Securities talked about Reliance Retail’s share growth. He said:
“Currently, Reliance Retail shares are traded in the range of Rs 1,500 and Rs 1,550 apiece. The premium has more than doubled since last year when the company sold stakes to raise money.”
Founded in Delhi, Arms Securities deals in unlisted shares. It helps business firms in buying and selling equity shares.
In the last quarter of 2020, the firm saw a 88% year-on-year(YoY) surge in net profit at Rs 1830 crore. In the same quarter, the retail firm also recorded a turnover of Rs 37845 crore.
The company also claimed that its grocery and electronics business has observed double-digit growth, whereas fashion and lifestyle business units are showing significant improvement.
In FY21, the firm expects to achieve a net profit of Rs 5570 crore on total revenue of Rs 135310 crore.
In a detailed discussion with Economic Times, Vaishali Dhankani, founder UnlistedDaq Venture of Analah Capital, talked about the recent profit of Reliance Retail. She also stated its future IPO and unlisted shares buying.
“With enough firepower, the company is perceived to be doing well, especially when citizens are looking for home deliveries amid a second wave of the virus.”
She further added:
“Despite no clarity on the IPO dates and which vertical of reliance Retail will come with an IPO, wealthy investors are looking at acquiring this stock from the private market.”