RIL has decided to acquire Adani Retail, the Gujarat based retail chain controlled by the Rs 13,500 crore Adani Group.
NEW DELHI: Reliance Industries, which has been in talks with several small retail chains in the past (including food and grocery chain Subhiksha) for acquiring them, seems to have finalised one deal.
According to industry sources, RIL has decided to acquire Adani Retail, the Gujarat based retail chain controlled by the Rs 13,500 crore Adani Group.
Talks between the two parties have been finalised and the deal is expected to be closed soon, said the sources.
The Adanis have about 54 stores across all formats such as neighbourhood stores, supermarkets and hypermarkets, spread across 15 cities in Gujarat. The company had planned to have about 65 stores by the end of this year.
Adani Retail will have a topline of about Rs 200 crore this year. The valuation and the premium RIL has agreed to pay could not be ascertained.
Adani Retail CEO Devang Desai could not be reached for comment. An RIL spokesperson declined to comment.
But why are the Adanis selling out? According to sources, the retail business has seen 100% growth over the last two years but the promoters are keen to exit since it is not their core focus area.
Then, with the retail industry suddenly becoming active — after the commencement of Reliance’s fruit and vegetable retail stores in Hyderabad last month and now with the Bharti-Wal-Mart deal — the promoters believed that this was the right time to offload a profitable but non-core business.
Transport, energy and global commodity trading are some of the businesses the Adani Group is into and the six year old retail venture was a misfit among these. The group’s flagship company, Adani Enterprises, posted a turnover of over Rs 9,000 crore last fiscal.
For RIL, this transaction makes a lot of sense — it provides the company with a readymade retail infrastructure and real estate to begin operations in Gujarat.
RIL has been looking at acquisitions as a way to scale up its retail business for some time now.
Not only is the group one of the contenders for the government-owned Super Bazar chain of stores across Delhi, it has also been in talks to acquire state cooperatives - such as the HPMC - for getting better distribution and sourcing muscle.
While Super Bazar will provide RIL prime real estate for its business in the Capital, HPMC would help sourcing of fresh fruits (such as apples) and veggies from Himachal. Some months back, RIL acquired the Sahkari Bhandar chain in Mumbai - which is also expected to provide similar synergistic benefits to the company.
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