Reliance unveils the “Next Big Idea”

Company set to explore Indian Consumption Story

Reliance Industries finally announced its mega foray into the Retail world. Calling retailing "the next big idea" in the company's plans, Reliance chairman Mukesh Ambani said the petrochemicals giant would set up a 100 per cent owned subsidiary, Reliance Retail, to "spearhead this revolution."

The company will initially infuse Rs.10000 Crore into the retail setup and gradually increase it to Rs. 25000 Crore. Reliance Retail would have a footprint in 1,500 cities and towns through convenience stores, supermarkets, speciality stores, and hypermarkets; and will create 10 lakh jobs. The company would partner farmers, logistics operators, small shopkeepers and traders in this initiative.

Reliance could emerge as the biggest single player in India's burgeoning retail market. The spending power of its estimated 300 million strong middle class has been on the rise, making the sector increasingly attractive to domestic and foreign investors. India's retail market is estimated to be worth around $200 billion but it is still hugely fragmented, with organised retail outlets comprising just two percent of the sector. Reliance entry in this segment is set to change the dynamics in this sector.


mudit said...

Hi rajesh
what is the value per share of retail business of reliance industries? Also do you think reliance would face tough competition from the existing players in this segment?


KK said...

Dear Rajesh

Is it the right time to enter L&T and NTPC.
Please advice


insider said...

Mr. KK, its time to exit the markets and not enter. take out your money and wait for markets to fall below 8500 to enter again

Rajesh Soni said...

Hi Mudit,
It would be difficult to value reliance's retail business value at this stage. Anyways it would remain part of reliance industries and doesn;t look like that mUkesh will get it lisetd separately till it is established.

As far as competition is concerned, due to its aggresive strategy it would be other way round, i.e existing players have more risk from reliance than reliance from them.

Rajesh Soni said...

Hi Kk
From medium to long term perspective,the answer would be Yes. Both stocks are good for investment.

Anonymous said...

Rajesh ji i bought some shares of aftek infosys at 95 some time back,now the script is near to 60 range what shud i do should i average out or should i keep up with what i already have...also please tell some defensive stock which can give a modest return of 15% over a years time.......


abhishek said...

Hi rajesh,
your view on GE shipping please. with ONGC agreeing to accept the demerger will the stock be able to touch 300 mark?
i highly value your advice.


Anonymous said...

can anybody tell what is diluted EPS amd how is it different from normal EPS ?

Rajesh Soni said...

Hi rituparna
Right now, one should concentrate on large cap stocks as these are the stoaks which will move the markets. Hence I would suggest that you should not put any more money in aftek (or probably you would be better off disposing aftek and invetsing in infosys or satyam). Mid caps stocks will run only after the large cap show strength.

Rajesh Soni said...

Diluted EPS includes impact of warrants, pref. shares and convertible debentures (i.e. securities that will be converted to equity sahres at a future date and hence will dilute the profits available to shareholders).

Rajesh Soni said...

Hi abhishek
I cannot predict if GE shipping would touch 300 or not but the news of ONGC clearing the demerger would definitely reduce the downside from the current levels.

Anonymous said...

Hi rajesh
Markets are showing some sign of strength. do you think the worst is over now and can fresh investment be made with a long term perspective. or do you think that we should wait more for buying?


Anonymous said...

dear investment guru ji
kindly give some investment ideas in the range of Rs. 10-15 with expected returns of 50-100 % in 6 months time .


Anonymous said...

Hi Rajesh & All,

Came to know of this blog from google, Needed to know the prospects of GTL Limited. Have been holding a few shares for quite sometime.


starry nights said...

Interesting blog here. stopped to say hello. my husband is into the indian stocks. he says India fund is really doing well.

Anonymous said...

markets are falling again. looks like this half of the year is going to remain choppy :(


Sounds like a very good and interesting company.