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9, December 2006 Pragati Maidan, New Delhi.
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The Mukesh Ambani-controlled Reliance Industries Ltd unveiled early ths week a mega double-barrel initiative, formally announcing its retail plans and also clearing a massive $1.1-1.3 billion initial public offer (IPO) from its new subsidiary, Reliance Petroleum Ltd (RPL). RIL’s retail business will be under a wholly-owned subsidiary — likely to be christened Reliance Retail Limited (RRL) — which will set up of hypermarkets, supermarkets, convenience stores, specialty stores in select cities and towns covering all the geographical regions in the country in the first phase. On the RPL initial public offering, the newly formed wholly-owned subsidiary of RIL, set up to implement the Rs 280bn Jamnagar Export Refinery Project (JERP), will tap the capital market with its maiden initial public offering (IPO) to raise $1.1-1.3 billion. The project is planned to be funded by debt of $ 3.5 billion and equity of $2.5 billion. The Reliance scrip remained flat and closed at Rs 701.45 on the Bombay Stock Exchange compared to the previous day's close at Rs 703.35. The IPO is likely to hit the market in the first half of 2006-07. FE reported on Monday that RPL will tap the capital market with a mega equity issue of over $1 billion. The equity issue will be the first after the twin issues of Reliance Polypropylene Ltd and Reliance Polyethylene Ltd (popularly known as ilu-pilu in the stockmarkets) and the Reliance Petroleum one in the early 1990s. The JERP will comprise 27 million metric tonnes per annum (MMTPA) refinery and 1 MMTPA polypropylene project at the special economic zone in Jamnagar, Gujarat, at an estimated cost of US $ 6 billion. RPL would continue to be a subsidiary of RIL even after the completion of raising of equity. It is likely to be commissioned by the second half of 2009. With the commissioning of JERP, RIL will become the world’s largest refiner. On the retail side, the first outlet, likely to be unveiled in Ahmedabad in mid-2006, is being designed at the Ahmedabad-based National Institute of Design. Indian firms were expected to invest about Rs 31bn a year in retail, according to a recent report on the sector by Cris Infac. It forecast India's retail industry would grow 25-30% annually and triple in size to Rs 1,09,000 by 2010, driven by its fastest-growing segments, food and groceries.
Date: 24-Jan-2007
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