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Rs. 5,000 Crores Net Profit For Reliance Retail Ltd In FY22

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After the GST recovery is deducted, the net revenue from operations saw a surge of 29 per cent to reach Rs. 1,69,397.35 crores

Reliance Retail Ltd. recorded a net profit of about Rs. 5,000 crores in the fiscal year between 2021- 22. The entity’s net profit saw a surge by 7.6 per cent to reach ₹4,934.65 crores in the fiscal year ending March 31, 2022.

After the GST recovery is deducted, the net revenue from operations saw a surge of 29 per cent to reach Rs. 1,69,397.35 crores. The firm, which is India’s largest retailer recorded a net profit of three times the combined profit of its close rivals, namely, Avenue Supermarts, Tata-owned Trent, Shoppers Stop, Spencer’s Retail, and V-Mart Retail. Its revenue too was more than four times that of these rivals’ combined revenue.

As per the firm’s quarterly earnings announcement, the consolidated gross retail revenue for the fiscal year of 2022 reached Rs. 1,99,704 crore and the net profit was of Rs. 7,055 crore. In the previous fiscal, the firm’s gross revenue from operations had recorded a surge of 2 per cent reaching Rs. 1,49,925 crores and its net profit saw a decline by 17 per cent to record Rs. 4,587 crore. The firm’s net revenue from operations was ₹131,687.81 crore. In the recent annual report for the fiscal year of 2022, Reliance Ind claimed to have invested Rs. 30,000 crore for expansion of its stores presence. The firm claims to have added over 2,500 stores and 11.1 million square feet of warehousing space during the year.

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5G Auction Enters Day Three

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Ashwini Vaishnaw said that “good competition” was seen in almost all bands on offer

India’s first 5G auction on Wednesday received bids worth Rs 1.49 trillion on day two

, as aggressive bidding across bands by players like Reliance Jio and Bharti Airtel pushed the sale over to the third day.

As many as five rounds of bidding were conducted for the 5G spectrum, capable of offering lag-free connectivity and ultra-high-speed internet.

Telecom Minister Ashwini Vaishnaw said that “good competition” was seen in almost all bands on offer.

Vaishnaw expressed happiness at the response received for the 700 MHz band, which did not find any takers in the last two auctions held in 2016 and 2021. The coveted and expensive 700 MHz band is important for coverage of far-flung areas.

“The sector is coming with new energy, and that is reflected in response to 5G auctions,” Vaishnaw told reporters.

Firms run by tycoons Mukesh Ambani, Sunil Bharti Mittal and Gautam Adani as well as Vodafone Idea had put in bids worth Rs 1.45 trillion on the opening day on Tuesday when four rounds were held, and the incremental demand for airwaves came in five rounds held on Wednesday.

Vaishnaw said the bidding will continue on Thursday.

“I am happy to see good competition in the auction, good competition for almost all bands have come in,” he said, adding “bids worth Rs 1,49,454 crore have been received so far at the end of the 9th round”.

Analysts said Ambani’s Reliance Jio may be the most aggressive of those in the race.

The minister said bands, such as 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2500 MHz, 3300 MHz, and 26 GHz, saw notable activity.

“The 700 MHz band was never sold in the past but sold this time. We are confident it will provide good service quality for far-flung areas of the country,” the minister said.

As per the process, it will not be known until the auction concludes as to which company got how much airwaves.

The response logged on the first day of Rs 1.45 trillion had exceeded all internal estimates of the government and breached the record levels of 2015, a year when revenue collection from auction had been Rs 1.09 trillion.

The bidding and demand seen on the second day is 87 per cent more than the government’s internal estimates of Rs 80,000 crore, for the auction.

The minister has acknowledged that the response had gone “far beyond our expectations”. Going by the current participation levels, auctions would surpass the budgeted provisions.

The spectrum auction will pave the way for the rollout of 5G services with ultra-high speeds (about 10 times faster than 4G), lag-free connectivity, and can enable billions of connected devices to share data in real-time.

In addition to powering ultra-low latency connections, which allow downloading full-length high-quality video or movie to a mobile device in a matter of seconds (even in crowded areas), fifth generation or 5G would enable solutions such as e-health, connected vehicles, more immersive augmented reality and metaverse experiences, life-saving use cases, and advanced mobile cloud gaming, among others.

The government has promised to allocate the spectrum in record time and sees 5G services rolling out by the September-October timeframe. The target is to allocate the spectrum by August 14-15.

In all, the auction is being held for spectrum in various low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz), mid (3,300 MHz) and high (26 GHz) frequency bands. A total of 72 GHz (gigahertz) of radiowaves worth at least Rs 4.3 trillion is up for bidding.

Purushothaman KG — Partner and Head, Digital Solutions and Telecommunications Industry Leader, KPMG in India — said the 2022 spectrum auction for 5G rollout has been “by far the best auction in the past few years”.

“With more than 75 per cent of Earnest Money Deposit (EMD) amount having been utilised on Day one…day two was expected to focus on select participation on 26 GHz and 3.5 GHz. 700 MHz has been preferred by operators to drive focus on indoor use cases, broadcasting use cases and relatively quicker roll outs with fewer number towers required,” Purushothaman said.

The government’s drive to encourage a “Make in India” stack for equipment and devices will see a larger, India-focused ecosystem play, which is reforming and revolutionary.

(PTI)

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Benchmark Indices Snap Six-Day Rally As Reliance, Autos Drop

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The NSE Nifty 50 index fell 0.53 per cent to 16,631, while the S&P BSE Sensex slipped a tad more to 55,766.22, after rising for six straight sessions

Indian shares broke their longest gaining streak since last October on Monday, as automakers slid and index heavyweight Reliance Industries dragged after its earnings fell short of expectations. The NSE Nifty 50 index fell 0.53 per cent to 16,631, while the S&P BSE Sensex slipped a tad more to 55,766.22, after rising for six straight sessions. Last week, the indexes rose more than 4 per cent each in their best performances since February 2021 amid expectations that inflation had peaked, even as markets across the globe geared up for central banks to deliver more rate hikes.

The U.S. Federal Reserve is expected to raise interest rates by another 75 basis points later this week as it looks to tackle stubbornly high inflation, while India’s central bank will meet next week to set the policy roadmap. India’s most valuable company Reliance fell 3.3 per cent on its worst day since July 1, after its first-quarter profit missed estimates due to surge in costs.  Shares of food delivery firm Zomato plunged 11.3 per cent to a record low as a one-year lock-in period for promoters, employees and other investors came to an end following a blockbuster listing last year.

The Nifty Auto index, which had jumped 8 per cent this month up to Friday’s close, slid 1.7 per cent, led by a fall in Mahindra and Mahindra  and top carmaker Maruti Suzuki. Ahead of quarterly results, Nifty 50 component Tata Steel added 2.6 per cent, Axis Bank slipped 0.5 per cent, while Tech Mahindra lost 1.1 per cent. The Nifty Metal index was a bright spot among the sub-indexes, climbing 1.5 per cent to its highest since June 10.

(Reuters)

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Reliance Expects Gas Price To Rise In October

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After remaining a loss-making provision for several quarters, Reliance’s gas exploration business has begun reaping rewards of a global surge in energy prices that have already pushed the rates to a record high

Reliance Industries Ltd expects prices of natural gas in India to rise again in October but wants government-dictated caps to go, in a bid to align domestic rates with global energy prices. The conglomerate, controlled by billionaire Mukesh Ambani, expects the price cap for its KG-D6 gas sales to rise over the current USD 9.92 per million British thermal units, Sanjay Roy, senior vice-president for exploration and production said in an investor call following the announcement of the firm’s quarterly earnings on Friday.

After remaining a loss-making provision for several quarters, Reliance’s gas exploration business has begun reaping rewards of a global surge in energy prices that have already pushed the rates to a record high. The government sets gas prices every six months based on international rates. The price of gas from old or regulated fields was more than doubled to a record USD 6.1 per mmBtu from April 1, and that for difficult fields like those lying in deepsea to USD 9.92 per mmBtu.

Rates are due for a revision in October. It is anticipated that the price of gas from old fields of state-owned Oil and Natural Gas Corporation (ONGC) will be hiked to about USD 9 per mmBtu and the cap for difficult fields will rise to double digits. Reliance produced about 19 million standard cubic meters per day of gas from its newer fields in the eastern offshore KG-D6 block in the April-June quarter. KG-D6 block lies in deepsea and so gets a price equivalent to that for difficult fields.

“Price ceiling for KGD6 (R-Cluster/Sats) revised to USD 9.92 per mmBtu for H1FY23 (April-September 2022) which is expected to rise further for H2FY23 (October 2022 to March 2023),” Roy said. But this rate remains disconnected with global prices. “We do see that the domestic price ceiling remains disconnected, whether the prices are elevated or when prices fall. And you know we are continuing our advocacy for removal of ceiling prices. Overall, we expect higher gas price realizations in FY23 and in the quarters to come,” he said.

Reliance got a price of USD 22.48 per mmBtu for 0.7 mmscmd of gas it produces from coal seams (CBM) from blocks in Madhya Pradesh. There is no cap on CBM gas price. Higher gas prices propelled a 80.5 per cent rise in revenue from the business to Rs 3,625 crore during April-June and a 76 per cent jump in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) to Rs 2,737 crore. Roy said the company is expecting the MJ field in the KG-D6 block to be on stream by the third quarter of this fiscal year, which will help take the output from the block to about 30 mmscmd.

“Overall, the outlook is, once the MJ field is commissioned, we should be progressively moving towards delivering more than a billion cubic feet per day (30 mmscmd) by FY24 (April 2023 to March 2024),” he said. On the elevated global gas prices, he said the shift in European demand from Russian gas to LNG and some supply destruction are driving prices. Current prices of benchmark JKM are ruling at about USD 38 per mmBtu. “So, prices continue to remain elevated and are expected to, given the challenges that are there today,” he said.

The Indian gas market outlook, he said, remains robust, with the availability of domestic gas being one of the reasons. “Because domestic gas particularly like in KG-D6, where there is a price ceiling and that is much in demand as compared to the market prices that are currently prevailing at these times,” he said. He further noted, “Now, in terms of price ceiling, as you all are aware and I mentioned earlier, the price must move up and we will see higher realizations. It is expected that, based on higher energy prices, this will go further up.”

Reliance and its partner bp plc of UK produce about 19 million standard cubic meters per day (mmscmd) of gas from two sets of new fields in the deepsea block KG-D6. Reliance-bp is currently producing about 20 per cent of India’s total domestic production and MJ would help increase this to up to 30 per cent.

(PTI)

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Future Retail Says Will Act To Reverse Store Takeovers By Reliance

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Reuters has reported that many in Future’s management were in the dark about Reliance’s plans

India’s Future Retail (FRTL.NS) said on Wednesday it was committed to taking back its stores which were seized by rival Reliance, saying it had been surprised by the move.

Reliance, India’s biggest retailer, stunned Future on Feb. 25 with its staff suddenly showing up at many of Future’s biggest stores to assume control, in what was seen as a de facto takeover. read more

The takeover occurred even though Future’s sparring partner, Amazon.com Inc , says it had legal injunctions in place prohibiting such store transfers.

Reuters has reported that many in Future’s management were in the dark about Reliance’s plans. 

In a statement to Indian stock exchanges on Wednesday, Future said it was committed to take all action to seek “reversal of takeover of the stores” by Reliance.

Future did not elaborate how it would do so, but said it was surprised by the “drastic and unilateral action” taken by Reliance.

(Reuters)

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Reliance To Take Over Operation Of 200 Future Stores

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As Future failed to make the payments, Reliance has decided to run and rebrand about 200 outlets that would otherwise be closed

India’s top retailer, Reliance, will take the operation of at least 200 stores of Future Retail (FRTL.NS), which failed to make lease payments due to Reliance, two people with direct knowledge of the matter told Reuters on Saturday.

Since 2020, Reliance has failed to close a $3.4 billion deal to acquire the retail assets of Future, whose warring partner Amazon.com Inc has successfully blocked the transaction legally by citing violation of some contracts. Future denies any wrongdoing.

Future, Reliance and Amazon did not immediately respond to requests for comment.

The takeover of stores by Reliance signals Future’s worsening financial situation as its retail assets sale remains blocked due to legal battles. Future in January challenged its lenders in India’s Supreme Court to avoid facing insolvency proceedings over missing bank payments, citing its dispute with Amazon. read more

Future – which has more than 1,700 outlets, including the popular Big Bazaar stores – has been unable to make lease payments for some of its outlets. As a result, Reliance transferred the leases of some stores to its name and sublet them to Future to operate the stores, the sources said.

As Future failed to make the payments, Reliance has decided to run and rebrand about 200 outlets that would otherwise be closed, they said.

“Over 200 stores will transition to Reliance stores,” said one source, who asked not to be named as the details of the plan are not public.

In a letter seen by Reuters, Reliance offered Future employees at these stores new jobs on the same terms. “We welcome you to join our organization,” it reads.

Amazon has argued that Future violated the terms of a 2019 deal the companies signed when the U.S. giant invested $200 million in a Future unit. Amazon’s position has been backed by a Singapore arbitrator and Indian courts.

(Reuters)

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InMobi’s Roposo In Talks For Deal With Reliance Retail

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SoftBank-backed InMobi’s co-founder and CEO Naveen Tewari said in an interview that the company is looking to reach 1 billion users in the next 2-3 years by building various partnerships and expanding its footprint overseas

Digital technology firm InMobi’s social media arm Roposo is in discussions with Reliance Retail for a social commerce-related business deal which is expected to be rolled out in the next two quarters, a top official said on Tuesday.

SoftBank-backed InMobi’s co-founder and CEO Naveen Tewari said in an interview that the company is looking to reach 1 billion users in the next 2-to 3 years by building various partnerships and expanding its footprint overseas.

(PTI) 

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India Now Has Nearly 1.2 B Telecom Users, Reliance Jio Leads The Pack

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Reliance Jio has also toppled BSNL as the top fixed-line broadband service provider and now leads the segment with 4.34 million customers which had been dominated by the state-run telecom since its inception about 20 years ago.

The country’s telecommunications subscriber base grew marginally to 1.19 billion by the end of November 2021, Reliance Jio and Bharti Airtel expanding their user base, according data available with the Telecom Regulatory Authority of India (TRAI). 

Reliance Jio has also toppled BSNL as top fixed-line broadband service provider and now leads the segment with 4.34 million customers which had been dominated by the state-run telecom since its inception about 20 years ago.

Total wireless customer base in the country was 1.17 billion by the end of November, according to a monthly subscriber report published by TRAI. Both wireless and fixed-line connections registered growth during the month. “Total wireless subscribers increased from 1,166.30 million at the end of October 2021 to 1,167.50 million at the end of November 2021, thereby registering a monthly growth rate of 0.10 percent,” the TRAI report said.

Reliance Jio led the growth in the mobile segment with a net addition of 20,19,362 customers, taking its total subscriber base to over 428 million. Bharti Airtel added 13,18,251 new mobile subscribers. Vodafone Idea (VIL) continued to lose subscribers. The company lost 18,97,050 customers in November and its total subscriber base fell to 267.12 million. State-run telecom companies BSNL and MTNL too failed to gain customers in November. BSNL lost 2,40,062 mobile customers while MTNL lost 4,318 connections.

The fixed-line connections in the country increased to 23.55 million in November from 23.32 million in October with private players Reliance Jio and Bharti Airtel leading the race. Reliance Jio added 2,07,114, Airtel 1,30,902 and Quadrant added 8,287 new fixed-line customers, while the dominant player in the segment, BSNL, lost 77,434 customers in November. Vi lost 38,083 fixed-line customers, Reliance Communications 2,373, Tata Teleservices 2,019 and MTNL 1,828 customers.

Broadband subscribers in the country grew to 80.16 crore in November from 79.9 crore in October with Reliance Jio maintaining its lead in the segment. Reliance Jio fixed-line broadband customer base increased to 43.4 lakh from 41.6 lakh in October. BSNL’s customer base declined to 42 lakh in November from 47,2 lakh in October. Airtel fixed-line broadband customer base stood at 40.8 lakh in November. “

Top five service providers constituted 98.68 percent market share of the total broadband subscribers at the end of November,” TRAI said. Reliance Jio’s total broadband subscriber base stood at 43.3 crore in November. It was followed by Bharti Airtel with 21 crore  broadband customers, Vi at  12.24 crore, BSNL 2.37 crore and Atria Convergence broadband customer base stood at 19.8 crore.

(PTI)

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Reliance Joins Calls For India To Tighten Marketplace Rules

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Reliance did not name any company, the sources added, although its remarks chime with calls for greater regulatory oversight in India of ecommerce giants Amazon and Flipkart.

Indian retailer Reliance has called for tighter regulation of marketplace e-commerce platforms to ensure such websites treat all sellers equally, four sources told Reuters.

While India’s biggest retailer, with more than 12,000 stores, expanded its e-commerce operations in recent years, Reliance still lags market leaders Amazon and Walmart’s (WMT.N) Flipkart, both of which it counts as key rivals.

At a closed-door government meeting on Tuesday, Reliance told officials that India needed special regulations to ensure “non-discriminatory” treatment of sellers on marketplace websites, three of the sources with knowledge of the talks said.

Reliance did not name any company, the sources added, although its remarks chime with calls for greater regulatory oversight in India of ecommerce giants Amazon and Flipkart.

An Amazon executive said during the meeting that the company had taken note of concerns raised by the retail trading community, one of the sources said.

Amazon and Flipkart did not immediately respond to requests for comment.

India’s small retailers have in the past alleged the U.S. platforms give preferential treatment to select big sellers in which they hold discreet financial or business interests.

The U.S. companies deny this, saying they only run marketplaces connecting customers with independent sellers.

Traditional retailers raised concerns during Tuesday’s meeting, which was called by India’s industry promotion department, and were supported by a senior Reliance executive.

The sources said the executive said marketplace websites must act independently and should have no relationship with their sellers, indicating officials should incorporate such provisions into policy changes for the booming sector.

A spokesperson for the industry promotion department did not respond to a request for comment.

PUSHING HARD

The intervention by Reliance (RELI.NS), which is run by one of India’s richest men, billionaire Mukesh Ambani, signals its growing rivalry with U.S. ecommerce platforms in the race for supremacy in one of the world’s fastest growing retail markets.

As a local player, Reliance is able to sell goods to consumers directly on its website or apps, something foreign platforms cannot do in light of stricter regulations designed to protect the local retailer base.

“It appeared Reliance is pushing the government hard (on regulations) so that they succeed in ecommerce,” one e-commerce executive who attended the meeting said.

Last year, Reuters reported that Amazon favoured select sellers in India and used them to bypass foreign investment law of the nation. The U.S. company also ran a systematic campaign of creating knockoff goods and rigging search results to boost its own product lines, Reuters reported.

Amazon says it does not give preferential treatment to any seller or manipulate searches and complies with all Indian laws.

The Confederation of All India Traders said it had urged officials to establish an e-commerce regulator to hear retailers’ grievances at Tuesday’s meeting.

(Reuters)

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Mukesh Ambani Talks Of Leadership Transition At Reliance

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Reliance is now in the process of effecting a momentous leadership transition… from seniors belonging to my generation to the next generation of young leaders

Reliance Industries (RIL) Chairman Mukesh Ambani on Tuesday mentioned about leadership transition at his energy-to-retail conglomerate, saying he wants the process to be accelerated with seniors, including him, yielding to the younger generation. 

Ambani, who has previously not spoken about succession plans at the country’s most valuable company, said Reliance is “now in the process of effecting a momentous leadership transition.” Ambani has three children — twins Akash and Isha, and Anant.

Speaking at the Reliance Family Day, which marks the birth anniversary of the group’s founder Dhirubhai Ambani, Mukesh Ambani said Reliance Industries Ltd will become one of the strongest and most reputed Indian multinational companies in the world in the coming years, propelled by forays into the clean and green energy sector as well as retail and telecom business reaching unprecedented heights. “Achieving big dreams and impossible-looking goals is all about getting the right people and the right leadership. Reliance is now in the process of effecting a momentous leadership transition… from seniors belonging to my generation to the next generation of young leaders,” he said.

“All seniors — myself included — should now yield to the highly competent, extremely committed, and incredibly promising young leadership talent at Reliance,” Ambani said. “We should guide them, enable them, encourage them and empower them… and sit back and applaud as they perform better than us.” He did not elaborate. Reliance now has three verticals — the energy business comprising of oil refineries at Jamnagar in Gujarat, petrochemicals plants and new energy factories, the retail business made up of physical stores, and an online e-commerce unit in JioMart, and telecom and digital business housed in Jio.

Ambani said an organisational culture must be built at Reliance that outlasts its leaders. “I have no doubt that Akash, Isha and Anant as the next-gen leaders will lead Reliance to even greater heights.” In them, he saw “the same spark and potential” that legendary industrialist and his father had “for making a difference to millions of lives and contributing to India’s growth.” “Let us all wish them good luck in their mission to make Reliance ever more successful with even more transformative initiatives and achieving even greater accolades for our Reliance,” he said.

Ambani said the time is now to “lay the foundation for Reliance’s future growth over the coming decades” by seizing the humungous opportunity. He sounded cautious over not letting the guard down saying while normalcy is slowly returning after the pandemic, it still is clouded by uncertainty over the spread of the new variants.

“As we enter the second half of Reliance’s Golden Decade, I can tell you that the future of our company looks brighter to me than ever before. I can confidently make two predictions. First, India will become one of the top three economies in the world. Second, Reliance will become one of the strongest and most reputed Indian multinational companies in the world,” he said. Ambani said despite the pandemic, Reliance has completely re-engineered its energy business.

Energy business previously was confined to oil refining, petrochemicals, fuel retailing, and natural gas production. Now, it is investing billions of dollars in setting up clean energy factories. “Now, Reliance is poised to become a global leader in clean and green energy and materials,” he said. “This transformation of our oldest business will provide us the largest growth engine for Reliance and yet another opportunity to many of you to do things that will be first in the world.” With a presence in both online and physical store formats, Reliance Retail has revolutionized organised retail in India.

“In the past one year alone, we have onboarded nearly one million small shopkeepers and created nearly one lakh new employment opportunities. This growth engine will continue to create significant societal value by providing unlimited opportunities for our partners and employees,” he said. Telecom arm Jio has gained over 120 million subscribers and brought fiber to nearly 4 million homes and commercial establishments. “It has laid the foundation for making India the world’s premier digital society,” he said.

(PTI)

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