Even before the official announcement of the listing of Reliance Retail, investors are already valuing the business way above those of its listed competitors.
The valuation of India’s biggest retailer by revenue crossed Rs. 2.5 lakh crore last week in the unofficial market or 75 per cent more than the market capitalisation of seven of its listed peers put together.
The shares of Reliance Retail were trading at Rs. 475-Rs. 500 in the past two weeks that it started trading in the unofficial market. The company has surpassed the combined valuations of Avenue Supermarts, owner of DMart, Future Retail, Trent and Spencer’s.
Notably, Reliance Industries’ market capitalisation is Rs. 8.04 lakh crore.
Reliance Industries could demerge its retail arm for enlistment owing to the mounting debt on the group amounting to a net Rs. 2.72 lakh crore as on 31 March 2019.
Reliance Retail became the first domestic retail company to post more than Rs. 1 lakh crore in annual revenues. The company’s income in 2018-19 was Rs. 1,30,556 crore, 89 per cent more than the previous year’s Rs. 69,198 crore.
It reported Rs. 6,201 crore as profit before depreciation, interest and taxes (PBDIT) for the year as opposed to Rs. 2,529 crore in FY18, marking an increase of 145 per cent.
Kishore Biyani’s Future Retail, on the other hand, posted sales of Rs. 20,333 crore in FY19.
At Rs. 500 a piece, Reliance Retail is at a Price to Earnings (PE) ratio of 200 times its net profit for the last fiscal year. Its domestic competitors, Avenue Supermarts and Future Retail, are trading at 93 times and 33 times, respectively.
Global retail giant Walmart is currently trading at a PE of 22 while Tesco and Carrefour are trading at 17 times and 21 times, respectively.
Bharat Tex Special Report 2026 
