Reliance Retail aims to double borrowing cap to ₹1 lakh crore | Techno Glob


Reliance Retail Ltd has sought shareholder approval to double its borrowing limit from Rs 50,000 crore to Rs one lakh crore as it presses the pedal for future growth and expansion.

The company’s boorowings as of March 31, 2022 stood at Rs 40,000 crore and the increased borrowing limit will allow it to raise up to Rs 60,000 crore as debt.

The company will seek shareholder approval at its next annual general meeting on September 30 to raise the limit currently set at Rs 50,000 core “for the purposes of the company’s business”, Reliance Retail’s latest annual report said.

Reliance Retail is accelerating its expansion with plans to open more than 2,000 physical stores per year focusing on smaller markets. At the same time, Reliance wants a bigger slice of the e-commerce pie with JioMart, Ajio Reliance Digital and a new platform dedicated to third-party sellers. The Ambanis also recently announced plans to make a big foray into the FMCG sector.

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According to recent disclosures, Reliance Retail had invested Rs 30,000 crore in 2021-2022 to expand its in-store presence, on acquisitions and strategic partnerships.

Reliance Retail’s latest annual report stated that its borrowings as of March 31, 2022 amounted to Rs 40,756.44 crore, of which Rs 12,021 crore was long-term borrowings and Rs 28,735.44 crore was loans. short term. Of the short-term loans, Rs 28,733.7 crore were unsecured loans and advances from related parties. These are intercompany deposits of the holding company.

Reliance Retail’s immediate holding company is Reliance Retail Ventures Ltd, which is a majority-owned subsidiary of Reliance Industries Ltd.

“Given that most of the existing debt is short-term and must be repaid within a year, it is possible that Reliance Retail will seek to refinance short-term loans to facilitate cash flow,” said said Mohit Yadav, founder. of the economic intelligence company AltInfo. “The substantial increase in the borrowing limit shows that they plan to borrow more for expansion and operational expenses,” he said.

An email sent to Reliance Retail went unanswered until Wednesday press time.

A year ago, Reliance Retail won shareholder approval for a borrowing limit of Rs 50,000 crore. According to the annual report, Reliance Retail’s borrowings in 2020-21 were Rs 14,745.88 crore, which was entirely short-term loans.

Reliance Retail’s own-source operating revenue for 2021-22 increased by 29% year-on-year to Rs 1,93,456 crore, while net profit was Rs 4,934 crore. The business achieved an EBITDA milestone of Rs 10,000 crore in one year for the first time in FY22 and posted a record EBITDA of Rs 10,365 crore, a growth of 24%.

In the annual report, the company said that in the last fiscal year it opened more than 2,000 new stores, bringing the total number to 14,385 stores with a total area of ​​39 million square feet. It said it more than doubled its warehousing and fulfillment capacity, and also doubled daily orders across all of its e-commerce channels. Registered customers grew 24% year-on-year to 193 million in FY22. Reliance Retail further stated that in new commerce (digital B2B sales), the merchant partner base more than tripled last year.



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