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Time of India
4 days ago
- Business
- Time of India
Reliance Industries shares in focus as plans to spin off FMCG brands into new arm take shape
Shares of Reliance Industries Ltd (RIL) are set to be in focus on Thursday, July 3, after the conglomerate announced a major restructuring of its consumer business, spinning off its fast-moving consumer goods (FMCG) brands into a new subsidiary ahead of a potential mega initial public offering (IPO). Reliance Industries is carving out its growing FMCG portfolio from its retail units to form a new entity — New Reliance Consumer Products Ltd (New RCPL) — which will be a direct subsidiary of RIL, much like Jio Platforms. The restructuring is intended to give the business 'specialised and focused attention', as well as draw interest from a 'different set of investors', according to a June 25 National Company Law Tribunal (NCLT) order seen by The Economic Times. The FMCG brands are currently housed across three group entities — Reliance Retail Ventures Ltd (RRVL), Reliance Retail Ltd (RRL) and Reliance Consumer Products Ltd (RCPL). These will now be consolidated under New RCPL as RIL prepares for a public listing of its broader retail business. 'The consumer brands business is one of building brands, managing the entire product lifecycle from research, development, manufacturing, distribution and marketing,' the NCLT order said. 'This is a large business by itself requiring specialised and focused attention, expertise and different skill sets as compared to retail business.' Strategic positioning ahead of IPO RIL chairman Mukesh Ambani has previously indicated plans for IPOs of the group's telecom and retail arms. Analysts suggest that the FMCG spin-off is a step toward readying the retail business for listing by isolating high-growth, capital-intensive verticals that may otherwise skew valuation. According to the NCLT document, 'This business also entails large capital investments on an ongoing basis and can attract a different set of investors.' It added, 'The consumer brands business is not part of the retail business and it is proposed that this business is housed in a direct subsidiary of RIL.' A person aware of the company's internal discussions told The Economic Times that separating the FMCG unit 'could have inflated valuations' and may have made the IPO process more complex. By carving it out, RIL can streamline the offering and offer greater clarity to investors. Rs 11,500 crore FMCG play Reliance's FMCG business, worth Rs 11,500 crore in FY25, has grown through both homegrown labels and strategic acquisitions. Its product lineup includes Campa (soft drinks), Independence (packaged groceries), Ravalgaon (confectionery), SIL (jams and sauces), Sosyo (regional beverages), and Velvette (shampoos), among others. RCPL, the existing consumer goods arm, sells products at discounts of 20–40% compared to incumbents like Coca-Cola, Mondelez and Hindustan Unilever, while also offering higher trade margins — a strategy designed to rapidly gain market share. With RRVL already valued at over $100 billion, the upcoming IPO, if launched, could rank among the largest in recent Indian corporate history. Investors are expected to closely track further developments as RIL finalises the demerger and reveals listing timelines. Also read | Reliance Industries shares up 25% in 2025; 4 reasons stock could gain another 18% ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Economic Times
4 days ago
- Business
- Economic Times
Reliance Industries shares in focus as plans to spin off FMCG brands into new arm take shape
Shares of Reliance Industries Ltd (RIL) are set to be in focus on Thursday, July 3, after the conglomerate announced a major restructuring of its consumer business, spinning off its fast-moving consumer goods (FMCG) brands into a new subsidiary ahead of a potential mega initial public offering (IPO). ADVERTISEMENT Reliance Industries is carving out its growing FMCG portfolio from its retail units to form a new entity — New Reliance Consumer Products Ltd (New RCPL) — which will be a direct subsidiary of RIL, much like Jio Platforms. The restructuring is intended to give the business 'specialised and focused attention', as well as draw interest from a 'different set of investors', according to a June 25 National Company Law Tribunal (NCLT) order seen by The Economic Times. The FMCG brands are currently housed across three group entities — Reliance Retail Ventures Ltd (RRVL), Reliance Retail Ltd (RRL) and Reliance Consumer Products Ltd (RCPL). These will now be consolidated under New RCPL as RIL prepares for a public listing of its broader retail business. 'The consumer brands business is one of building brands, managing the entire product lifecycle from research, development, manufacturing, distribution and marketing,' the NCLT order said. 'This is a large business by itself requiring specialised and focused attention, expertise and different skill sets as compared to retail business.' RIL chairman Mukesh Ambani has previously indicated plans for IPOs of the group's telecom and retail arms. Analysts suggest that the FMCG spin-off is a step toward readying the retail business for listing by isolating high-growth, capital-intensive verticals that may otherwise skew valuation. ADVERTISEMENT According to the NCLT document, 'This business also entails large capital investments on an ongoing basis and can attract a different set of investors.' It added, 'The consumer brands business is not part of the retail business and it is proposed that this business is housed in a direct subsidiary of RIL.'A person aware of the company's internal discussions told The Economic Times that separating the FMCG unit 'could have inflated valuations' and may have made the IPO process more complex. By carving it out, RIL can streamline the offering and offer greater clarity to investors. ADVERTISEMENT Reliance's FMCG business, worth Rs 11,500 crore in FY25, has grown through both homegrown labels and strategic acquisitions. Its product lineup includes Campa (soft drinks), Independence (packaged groceries), Ravalgaon (confectionery), SIL (jams and sauces), Sosyo (regional beverages), and Velvette (shampoos), among the existing consumer goods arm, sells products at discounts of 20–40% compared to incumbents like Coca-Cola, Mondelez and Hindustan Unilever, while also offering higher trade margins — a strategy designed to rapidly gain market share. ADVERTISEMENT With RRVL already valued at over $100 billion, the upcoming IPO, if launched, could rank among the largest in recent Indian corporate history. Investors are expected to closely track further developments as RIL finalises the demerger and reveals listing timelines. Also read | Reliance Industries shares up 25% in 2025; 4 reasons stock could gain another 18% (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times) ADVERTISEMENT (You can now subscribe to our ETMarkets WhatsApp channel)
