Reliance Retail Valuation update

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In a recent report on Reliance and JIO Financial Services demerger, Jefferies has come up with a SOTP (Sum of the parts) valuation for Reliance Industries Limited (RIL).

In the past as well, we have used the same report to get an understanding of valuation of Reliance Retail, which is one of the companies available in the unlisted markets. So lets dig in:

Retail Business Valuation:

Core Offline: EBITDA (FY25E) – 24.4K Cr ; EV/EBITDA – 30x i.e: 7.3 Lac cr


Non-Core Offline: EBITDA (FY25E) – 2.8K Cr ; EV/EBITDA – 12x i.e: 33.7K Cr


Ecommerce: Valuation: ~1.03 lac cr


Retail Biz Valuation: 8.69 lac cr (As per Reports)

Current Market Cap at a price of 2350/sh: 11.58 Lac cr

It looks like, the unlisted markets are still overpricing which is already down from peak levels of 3500/sh. Investors should refer to the report to understand more on the valuations before investing in reliance retail.

Reliance Retail has posted a net profit of almost Rs. 5,000 crore in fiscal 2021-22, as per latest regulatory disclosures. Net profit grew 7.6% to Rs. 4,934.65 crore

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  1. The valuation above is as per assumptions taken by Jefferies
  2. Reliance Retail Limited(RRL), which is available in the unlisted markets is a step down subsidiary of Reliance Retail Ventures Limited (RRVL) (which is the direct subsidiary of RIL)
  3. There would be certain revenue streams which are directly booked into RRVL and not RIL, hence valuation of RRL might be lower than what has been calculated above
  4. There are certain convertible instruments in RRL’s capital structure which can reduce the per share equity price even lower as the equity capital base will widen once they convert into equity shares.

Altius Investech (Pre IPO | Unlisted Equity) has been cautioning its users on the issues above ever since 2020, when share price crossed 1200 Rs/sh

No Reco
Source: Jefferies and RRL Annual Reports

Also Read: Reliance Retail Net Profit Rise 114% in the Q1 FY2022 while the revenue expand 54%!

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