RIL's proposed retail venture Reliance Retail Ltd might garner five per cent of the country's overall retail market with revenues of $20 billion (about Rs 90,000 crore) in 6-7 years.
NEW DELHI: The $250 billion retail market in India, which remains abysmally under penetrated by the organised sector, is set for a huge transformation with corporate behemoth Reliance Industries' multi-billion dollar investment foray into this segment, says a leading equity research firm in Asia-Pacific.
RIL's proposed retail venture Reliance Retail Ltd might garner five per cent of the country's overall retail market with revenues of $20 billion (about Rs 90,000 crore) in 6-7 years, even on conservative estimates, CLSA Asia-Pacific Markets said in a latest report.
CLSA said that its valuation estimates indicates that when the venture reaches this revenue target, it could garner a market capitalisation of $17.5 billion (about Rs 78,750 crore) based on today's peer multiples.
It said that while Reliance is reported to have a much more aggressive target of reaching the $20 billion revenue in just four years, it has modelled a more conservative and gradual ramp-up that will see the target being achieved in seven years.
The projected revenue and market value figures could propel Reliance Retail right into the top league of India Inc within a few years as only five companies -- ONGC, RIL, NTPC, Infosys and TCS -- have higher market capitalizations currently.
CLSA said that the projected market cap figure for 6-7 years implies an un-risked current net value of $4.3 billion (nearly Rs 19,400 crore). This value puts Reliance Retail along with the country's top 30 companies in terms of market capitalisation even at current levels.
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