IPO Glow-Up: Reliance Puts Consumer Brands in the Solo Spotlight

Image Source: Outlook Business

Mukesh Ambani-controlled Reliance Industries Ltd (RIL) is restructuring its consumer goods empire by carving out its entire consumer brands into a new fully owned business entity—New Reliance Consumer Products Ltd (New RCPL). It is an operational optimization strategy and concentrating investor interest prior to the much-anticipated retail IPO.

Major Developments

The FMCG brands presently owned by Reliance Retail Ltd, Reliance Retail Ventures Ltd (RRVL), and Reliance Consumer Products Ltd (RCPL) would be consolidated into New RCPL.

The restructuring was approved by the National Company Law Tribunal (NCLT) on June 25.

New RCPL will be involved in production, marketing, distribution, and retailing of Reliance's consumer products business in beverages, packaged foods, personal care, fashion, and others.

The new firm will also invest in consumer goods in subsidiaries and joint ventures.

Business Rationale

Focused growth: FMCG is a capital-intensive and competency-different business that needs a different range of competencies than retail. Spinning out allows for focused growth and operational autonomy.

Investor Attraction: By separating the consumer brands from the other retail businesses, Reliance is trying to attract another category of investors interested in the FMCG business.

IPO Readiness: The move enables a cleaner, more efficient retail IPO, potentially to improve valuation and investor sentiment.

Brand Arsenal

The acquired brands and heritage in the FMCG portfolio include Campa (beverages), Independence (packaged groceries), Ravalgaon (confectionery), SIL (jams and sauces), Sosyo (regional drinks), and Velvette (shampoos).

Campa Cola has already gained double-digit market share in core geographies in two years of re-launch.

Over 3,200 distributors sell our products and hold them in over one million retail points in India.

Financial Pulse In FY25, the FMCG segment recorded a turnover of approximately ₹11,500 crore.

Over 60 percent of the sales were through general trade channels like kirana shops.

Reliance Retail saw a 29.1 percent quarter-on-quarter profit rise in Q4 FY25 at ₹3,545 crore with gross revenue rising to ₹88,620 crore.

Operations Plan

Reliance Retail Ltd's FMCG brands shall be demerged and transferred to RRVL in a slump sale.

RCPL will be merged with RRVL.

Its consumer brands division will be demerged and shifted to Tira Beauty Ltd, which will be renamed as New RCPL.

New RCPL will be an immediate subsidiary of RIL, similar to that of Jio Platforms.

Market Outlook

Reliance aims to grow its FMCG business across the nation by March 2027.

The pricing strategy outcompetes rivals like Hindustan Unilever and Coca-Cola by 20–40 percent and grants retailers greater trade margins.

The firm is pursuing over 600 million mass market consumers, one of the primary focuses being neighborhood store memberships.

Sources: CNBC TV18, Economic Times, Financial Express, Business Standard, HDFC Sky, MSN India