India’s most valuable company, Reliance Industries, led by Mukesh Ambani, is gearing up to make a significant investment in the FMCG sector. Reliance is preparing to infuse up to Rs 3,900 crore in its FMCG unit through equity and debt. The company will be competing with major players like Hindustan Unilever, ITC, Coca-Cola, Adani Wilmar, and others in this sector. On July 24, during an extraordinary general meeting, the board of Reliance Consumer Products (RCPL) passed a special resolution for this investment. According to its latest regulatory filing with the Registrar of Companies (RoC), this will be the company's largest capital investment since its establishment in November 2022.
According to the filing, RCPL has increased its authorized share capital from Rs 1 crore to Rs 100 crore and has approved the proposal to raise additional capital up to R 3,000 crore. The company’s board also approved offering, issuing, and allotting up to 775 million unsecured zero-coupon optionally fully convertible debentures at a face value of Rs 10 each, worth Rs 775 crore, in one or more tranches on a rights basis. Mohit Yadav, founder of business intelligence firm AltInfo, mentioned that this capital-raising step indicates the company's ambitious growth plans.
Isha Ambani, Director of Reliance Retail Ventures, stated that this strategic move shows that RCPL is preparing itself for potential acquisitions, significant expansion, or substantial investments in its product portfolio and market presence. However, RCPL did not respond to an email seeking further details. The company has just completed its first full year of operations in 2023-24. A source mentioned that while the board has approved the proposals for raising a certain amount of capital, the final decision on how much and when to raise it is yet to be made.
In FY 2024, RCPL received Rs 792 crore in debt capital from its holding company, Reliance Retail Ventures, on a rights basis. In FY 2023, RCPL had raised Rs 261 crore through the same debenture route. During Reliance Industries' recent AGM, Isha Ambani told shareholders that the company’s focus in the consumer brand business is on producing high-quality products at affordable prices to drive more consumption across India.
