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Reliance Retail Acquires a 96% Stake In The Urban Ladder

Reliance Retail has acquired a majority stake in online furniture retailer Urban Ladder. The acquisition will help RIL bolster its presence in the fast-growing e-commerce segment and widen its range of products.

Billionaire Mukesh Ambani-owned Reliance Industries’ retail arm has picked up a 96 percent stake in online furniture retailer Urban Ladder for over Rs 182 crore. 

Reliance Retail Ventures Ltd (RRVL), a subsidiary of Reliance Industries (RIL), has acquired equity shares of Urban Ladder Home Decor Solutions Pvt Ltd for a cash consideration of Rs 182.12 crore, RIL said in a statement on Saturday. 

The investment represents 96 percent holding in the equity share capital of Urban Ladder, it added. 

RRVL has a further option of acquiring the balance stake, taking its shareholding to 100 percent of the equity share capital of Urban Ladder, it said. 

Besides, RRVL has proposed making a further investment of up to Rs 75 crore in Urban Ladder. This is expected to be completed by December 2023, it said. 

This acquisition will help RIL in bolstering its presence in the fast-growing e-commerce segment and widening the bouquet of consumer products provided by it as it looks to compete with e-commerce majors like Amazon and Flipkart. 

The investment will further enable the group’s digital and new commerce initiatives and widen the bouquet of consumer products provided by the group, enhancing user engagement and experience across its retail offerings, the statement said. 

According to RIL, no governmental or regulatory approvals were required for the investment. In August, RIL had acquired a majority stake in the digital pharma marketplace Netmeds for around Rs 620 crore. 

Eyeing a larger market share 

RIL, which has been on a fundraising spree by selling stakes in RRVL, had earlier this month announced a Rs 9,555 crore investment from the Public Investment Fund of Saudi Arabia, taking the total to fundraise in the last two months to Rs 47,265 crore. 

The investment had valued RRVL at a pre-money equity value of Rs 4.587 lakh crore. 

Reliance Retail Ltd, a subsidiary of RRVL, operates India’s largest, fast-growing retail business, witnessing close to 640 million footfalls at its 12,000 stores across the country. 

Amazon, Reliance, and Walmart Inc’s Flipkart are locked in a battle to gain market share in India, where millions of middle-class customers are adopting online purchases of food and groceries due to the COVID-19 pandemic. 

India’s booming e-commerce market will be worth $86 billion by 2024, according to research firm Forrester. 

The stakes are particularly high for Amazon, which believes India is a big growth market after shutting its online store in China last year. 

Reliance Retail’s vision is to galvanize the Indian retail sector through its new commerce strategy, serving millions of customers by empowering micro, small and medium enterprises (MSMEs), RIL had said earlier. 

RRVL had previously raised Rs 37,710 crore from leading global investors including Silver Lake, KKR, General Atlantic, Mubadala, GIC, TPG, and Abu Dhabi Investment Authority (ADIA). 

Urban Ladder was co-founded by CEO Ashish Goel and COO Rajiv Srivatsa in July 2012. 

In 2014, Tata Sons Chairman Emeritus Ratan Tata had also invested in Urban Ladder, though the amount was not disclosed. In the past, the company had also raised funds from venture capital funds such as Sequoia Capital, SAIF Partners, Kalaari Capital, and hedge fund Steadview Capital. 

Besides online, Urban Ladder has a presence in offline channels and operates a chain of retail stores in several cities, including Bangalore, Chennai, Mumbai, NCR, Pune, and Hyderabad. 

Urban Ladder’s audited turnover in 2018-19 was Rs 434 crore and profit was Rs 49.41 crore.

Source: Business World

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