Reliance Industries, India’s largest private sector company looks to be highly aggressive on inorganic opportunities and connecting up various dots for its respective business verticals. Recently, in the last 10 days, Reliance Industries through its Solar and Retail Arm has acquired some stake in their respective field businesses, so let’s discuss some more things about this acquisition in this article as we move ahead.
i) Acquisition of Sterling and Wilson Solar Limited:
- On the last day of the year 2021 i.e., 31st December 2021, Reliance Industries acquired a 40% stake in Sterling and Wilson Solar Limited (name changed to Sterling and Wilson Renewable Energy Limited) by Reliance New Energy Solar Limited (RNESL), a wholly-owned subsidiary of the Company.
- Post such acquisition, RNESL has also become a promoter of SWREL besides the existing promoter and promoter group of the SWREL.
- Sterling and Wilson Renewable Energy Limited (‘SWREL’) has on December 30, 2021, made an allotment to RNESL of 2.93 Cr. equity shares of face value Rs. 1 each fully paid up by way of preferential allotment for cash for Rs. 375 per Equity Share aggregating to Rs. 1,099 Cr. Post such allotment, RNESL holds 15.46% of the total paid-up equity share capital of SWREL.
ii) Acquiring a 25.8% stake in Dunzo:
- Along with the announcement of foreign currency bond issuance, Reliance Industries also announced the acquisition of a 25.8% stake in Dunzo, a quick commerce player on Thursday 6th January 2022.
- Dunzo is India’s leading quick commerce player and the company has established itself as a market leader in an addressable market opportunity of US$ 50 billion+.
- Currently Dunzo is available across 7 metro cities in India and the additional capital will be used to expand the quick commerce business to 15 cities. Dunzo launched its instant delivery model ‘Dunzo Daily’ in Bengaluru earlier this year, which is seeing over 20% week-on-week growth. The Dunzo Daily model delivers daily and weekly essentials within 15-20 minutes, with a focus on providing high-quality fruits and vegetables.
- The US$ 240 million round was led by Reliance Retail Ventures with participation from existing investors Lightbox, Lightrock, 3L Capital, and Alteria Capital. Reliance Retail invested US$200M (~Rs. 1,488 Cr.), it will own a 25.8% stake on a fully diluted basis.
- The capital will be used to further Dunzo’s vision to be the largest quick commerce business in the country, enabling instant delivery of essentials from a network of micro warehouses while also expanding its B2B business vertical to enable logistics for local merchants in Indian cities.
- Moreover, Dunzo and Reliance Retail will also enter into certain business partnerships. Dunzo will enable hyperlocal logistics for the retail stores operated by Reliance Retail, further adding to Reliance Retail’s omnichannel capabilities. Dunzo will also facilitate last-mile deliveries for JioMart’s merchant network.
What Should Shareholders Do?
Reliance Industries seems to be tapping on the inorganic growth opportunities very aggressively and with the acquisition of a stake in Dunzo, the battle in the grocery space will get more interesting. Hence, one should closely observe the development in this space and see how the company performs there.