What Is Reliance Retails Real Value?

Reliance Retail Ltd. is valued anywhere between Rs 7.6 lakh crore and Rs 24.3 lakh crore. It simply depends on who you ask.

Reliance Industries Ltd. has valued its step-down retail subsidiary at a premium to what has been assigned by firms hired by the company.

Ernst & Young Merchant Banking Services LLP valued Reliance Retail at Rs 884.03 per share, and BDO Valuation Advisory LLP has pegged it at Rs 849 apiece, according to people in the know who shared details on the condition of anonymity. That's about Rs 7.63–7.95 lakh crore ($92.3–96.2 billion) for the company.

By comparison, RIL has offered Rs 1,362 per share to the minority shareholders, valuing the company at Rs 12.25 lakh crore ($129.5 billion).

The valuation report, a regulatory requirement, will be shared with the minority shareholders of Reliance Retail.

Reliance Retail Ventures Ltd. holds 898.69 crore shares, or 99.91%, of Reliance Retail. The remaining 78.65 lakh shares, representing 0.09%, are held by minority shareholders, which include investors other than the holding company.

Reliance plans to buy back and extinguish these shares.

Volumes of Reliance Retail shares trading in the over-the-counter private market have surged since the beginning of the year. According to data shared by the people cited earlier, the number of equity shares traded jumped to 2.45 lakh shares in June from 43,740 in January 2023. New investors purchased the shares on the private market.

This surge in demand has sent the price to Rs 2,700–3,000 per share in OTC trading, peging the value of the company at Rs 24.28 lakh crore. That's even higher than Reliance Industries' market value of Rs 18.50 lakh crore.

The company claims such trading in the private market, without fair-price discovery, is not in the interest of the investors in the securities market and is detrimental to their interests.