Reliance Industries Limited (RIL) started a procedure that could enable the company to realise value from the back-end warehouse and other logistics assets of its retail division through an InvIT (infrastructure investment trust). By registering a trust called Intelligent Supply Chain Infrastructure Trust with the Sebi (Securities and Exchange Board of India) at the end of February, Mukesh Ambani-led RIL, the nation’s largest retailer by revenue, scale, and profit, has already begun laying the groundwork for the proposed InvIT of its warehousing assets.
The warehousing assets that the group intends to sell will be kept in this trust. The petchem-to-personal goods conglomerate aims to arrange the vehicle as a privately put or listed InvIT and has started working with its financial and legal experts, albeit the proposal is still in its basic stages and specifics are still being worked out. It will require at least five stakeholders to meet Sebi standards.
RIL, the nation’s largest retailer by revenue, scale, and profit, has already begun laying the groundwork for the proposed InvIT of its warehousing assets.
Reliance has established Intelligent Supply Chain Infrastructure Pvt Ltd in addition to registering the trust, and this company is anticipated to be involved in managing the assets that would be stored under the InvIT.
The purpose of the company, as stated in its memorandum of association, which was submitted to the Registrar of Companies, is to build, develop, obtain, provide, manage, and carry on the business of storage, warehousing, cold chain, logistics infrastructure, supply chain, and facilities.
According to RIL’s most recent financial reports, Reliance Retail had a 33.6 million square ft portfolio of warehouse space as of last year. Reliance Retail increased its warehouse capacity to 22.7 million square feet in the fiscal year 2022 by adding 11.1 million square ft of space. The company’s warehouse area has tripled in size during the past three years. Reliance Retail raised the number of its stores from 14,412 to 17,225 during the past year, and by the end of the fiscal year 2022, retail floor space will have surpassed 60 million square ft, up from 40.6 million sq ft.
Reliance Retail had a 33.6 million square ft portfolio of warehouse space as of last year
The sources estimate that the assets that could be transferred to the InvIT are worth between Rs 20,000 and Rs 25,000 crore ($2.4 and $3 billion). As the assets are put into use, more will probably be added. More warehousing capacities InvITs are predicted to be constructed given the strong demand for warehouse space in a developing country like India. “A lot of money has been spent on building top-notch warehouse capacity for businesses like eCommerce, retail, manufacturing, and healthcare, among others.
Reliance’s Retail business is including Reliance Fresh, Trends, Reliance Digital, and Ajio, the retail industry includes food and drug stores as well as consumer electronics, fashion, and lifestyle products. Additionally, it has announced its entry into other new vertices, including FMCG and beauty. Nexus Select Trust, sponsored by Blackstone In the first week of May of this year, REIT, India’s first real estate investment trust featuring retail properties, will begin its first public offering to raise more than Rs 4,000 crore.
InvITs involve a number of parties, including the sponsor who establishes the trust and transfers the assets thereto, the trustee who holds the assets in trust for the benefit of the stakeholders, the investment manager who decides on acquisitions, divestments, and fundraising for the InvIT, and the project manager who oversees the day-to-day management of the underlying assets. Other infrastructure assets, like highways, electricity transmission lines, and renewable energy projects, have also been set up for InvIT.