Reliance buys Metro India for 2,850 kr | Daily News Byte

Reliance buys Metro India for 2,850 kr

 | Daily News Byte

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On December 22, Reliance Industries Ltd’s (RIL) division, Reliance Retail Ventures Ltd (RRVL), signed agreements to acquire 100% equity investment in METRO Cash & Carri India Pvt Ltd. (METRO India) totaling Rs. 2,850 crowns. The agreement is concluded until March 2023.

Mukesh D.  Ambani, Chairman and Managing Director, Reliance Industries Limited
Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited. | Source: Business Today

With over 3 million consumers in India, including 1 million repeat customers, Metro AG, a multi-channel cash and carry retailer has a large customer base. The acquisition will strengthen Mukesh Ambani-led Reliance’s position in the Indian retail industry. A chain of 31 large format stores in METRO India spanning 21 cities and supporting over 3500 employees would be available to Reliance Retail.

The first firm to introduce a cash-and-carry business model in India, METRO India is a wholly owned subsidiary of the German corporation Metro AG, which started operations in India in 2003. For entrepreneurs and retailers, METRO India has positioned itself as a reliable business partner.

It caters to customers like hotels, restaurants, workplaces, small businesses and Kirana stores and also sells things like vegetables and fruits, staples, gadgets, homewares and apparels.

Its highest sales performance since entering the Indian market, METRO India posted a revenue of Rs. 7,700 kroner (926 million euros) in the fiscal year 2021-22.

Perks for Reliance

On December 22, the share price of Reliance Industries rose after the company announced that it has acquired 100% equity stake in METRO India.

Metro India’s supply chain infrastructure and the downstream side of its operations would be available to RIL. In addition to wholesale customers, RIL will also gain 30 million new traders in the HORECA sector (hotels, restaurants, cafes).

By leveraging convenience and economies of scale across distribution networks, technology platforms and supply capabilities, the acquisition will further expand RIL’s physical store base and capacity to better serve customers and small businesses.

Isha Ambani, director of Reliance Retail Ventures Limited, said that the purchase of Metro India fits with the new business plan, which is to create a special model of co-prosperity by actively working with small businesses and retailers. She is confident that METRO India’s strong assets and Reliance’s comprehensive knowledge of India’s merchant and kirana system will enable the company to provide small businesses in India with a unique value proposition.

Reliance Store Logo
Source: Reuters

With more than 16,000 outlets spread across more than 7,000 cities, Reliance Retail is India’s largest retailer and the fastest growing company in the industry, now also venturing into fast fashion. The company reported 36% year-on-year growth in net profit at Rs. 2,305 crore during the quarter, while earnings stood at Rs 64,396 crore, as per Q2 FY23 data.

Steffen Greubel, CEO of Metro AG, said that they are offering METRO to India as a lucrative wholesale company expanding in a fast-growing sector. He claimed that he is confident that the firm has found a reliable business partner in RIL who is ready to manage METRO India for the long term in this competitive market.

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