Asia’s richest man Mukesh Ambani is actively taking care of investors for profitable retail units. A stock swap offer has been announced that will help shareholders of unlisted vertical Reliance Retail to monetize their liquid stock options.
Share swap values the company at more than UK’s largest supermarket chain Tesco Plc’s (being valued at $32 billion). It had received numerous requests from Reliance Retail employees holding its equity shares for giving them options to exit and liquidate their stocks.
The scheme will allow shareholders of Reliance Retail (unlisted vertical) to exchange their retail stocks for Reliance Industries Limited shares. Shareholders will get 1 share of RIL in exchange for 4 shares of Reliance Retail.
Share swap values the subsidiary at INR 2.4 trillion according to Bloomberg calculations. With parent company Reliance Industries Limited (RIL) reaching market capitalization at INR 9.8 trillion.
Mukesh Ambani promised to get the group’s net debt zero-to-zero by March 2021 after investing around $76 billion in the past 5 years. Revenue of India’s largest chain of neighborhood supermarket and consumer electronic stores (besides being top wholesale supplier to huge fleet of small shopkeepers) jumped to INR 1.3 trillion (by 89% since last year) and earnings before interest and taxes (EBIT) cloaked to INR 55.5 billion (increment of 169% since last year).
With 10,901 stores spread across the country, Mr. Ambani has no plans to be on the listing anytime soon. They might be there by 2024. “We will induct leading global partners in these businesses in the next few quarters, and move toward listing of both these companies within the next five years,” Ambani had told shareholders in August referring to the retail and telecom units.
“The company had implemented 2 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 mentioned on its website.
It seems like Mukesh Ambani is not only active in taking care and expanding his business across various verticals, but he’s also expressing interest in his shareholder’s value and their opinions. No doubt, market value cloaked to sky-high prices, most importantly he is (once again) successful in gaining truth and faith from shareholders of RIL