Brokers say an investment of Rs 8,278 crore from the Qatar Investment Authority (QIA) for a 0.99% stake has bolstered Reliance Retail Venture Limited (RRVL)’s valuation in line with its previous estimate of 8 ,280,000 Rs crore, equivalent to Rs 100 billion.
“With the listing of Jio Financial Services, we believe this investment can raise expectations for positive updates on the final listing of RRVL,” offshore brokerage Citi said in a note. Note, one day after the announcement of the decision.
It has a “buy” rating on Reliance Industries, which currently owns 88.9% of RRVL, with a target price of Rs 2,750. During the previous fundraising round in 2020, RRVL raised a total of Rs 47,625 crore from various global investors with a pre-equity value of Rs 4.21 lakh crore.
This shows that the value of the company has doubled in three years. National brokerage Motilal Oswal said its earnings before interest, taxes, depreciation and amortization (EBITDA) also doubled in the past three years and stood at Rs 17,900 crore in fiscal year 2023.
“We allocated 37x EV/EBITDA in FY25E to achieve an EV of Rs 11.7 lakh crore, with a value per share of Rs 1,670. This equates to Rs 1,485 at price,” he said. RIL shares”. The deal comes a month after the group announced that shares held by minority investors in Reliance Retail Ltd would be delisted and destroyed.
RRVL owns 99.91% of Reliance Retail, the remaining 0.09% is held by non-promoting shareholders. In addition to Reliance Retail, RRVL owns other subsidiaries and joint ventures such as Reliance Brands and Marks & Spencer, overseeing the rest of its clothing and other retail operations.
MOFSL expects RRVL to generate a revenue CAGR/EBITDA of 25%/34% in FY23-25 to reach Rs 4.1 lakh crore/32,000 crore by date 25.
Reliance Retail, with its largest store count and growing online platform, investments across the buying and selling process, and a track record of successful execution, is well positioned to lead the industry over the next decade, the company said in its annual report. report. report.
The company said that Indian spending habits will evolve due to many long-term factors. These factors include a young population, rising average incomes, growing aspirations for cheap Internet access, and better access to physical stores and online shopping in rural areas. village.
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