Reliance Retail moves to spin-off FMCG arm into new subsidiary
What's the story
Reliance Retail has filed a petition with the National Company Law Tribunal (NCLT) to restructure its fast-moving consumer goods (FMCG) business. The company plans to transfer this division into a new subsidiary, New Reliance Consumer Products Ltd. (RCPL). Similar to Jio Platforms, this new entity will be directly owned by Reliance Industries Ltd. (RIL), the parent company of Reliance Retail. The move is part of a larger internal restructuring plan for group entities.
Business consolidation
Why the FMCG business needs specialized attention?
Currently, Reliance's FMCG business is divided between Reliance Retail Ventures Ltd (RRVL), Reliance Retail Ltd (RRL), and Reliance Consumer Products Ltd (RCPL). The company has argued that the consumer brands business is a major operation in its own right, needing specialized attention, expertise, and skill sets different from those required for retail operations. It also said this sector requires huge capital investments regularly and can attract a different set of investors.
Growth
Reliance's consumer business saw huge revenue jump in FY25
Reliance's consumer business has seen a huge revenue jump, hitting ₹11,500 crore in FY25. The company is also expanding its presence in the FMCG sector with brands like Independence and Campa. This restructuring move comes as part of Reliance's larger strategy to streamline its operations and prepare for future growth opportunities.
IPO preparation
Strategic move ahead of a possible IPO
The spin-off of Reliance's FMCG business into New RCPL is seen as a strategic move ahead of a possible initial public offering (IPO). The restructuring aims to give the business "specialized and focused attention" and attract interest from a "different set of investors," according to an order from the NCLT.
Portfolio expansion
How Reliance's consumer goods arm targets market share
Reliance's FMCG business, valued at ₹11,500 crore in FY25, has grown through a mix of homegrown brands and acquisitions. Its portfolio includes Campa (carbonated drinks), Independence (staples), Ravalgaon (candies), SIL (spreads), Sosyo (regional drinks), Velvette (hair care), among others. The existing consumer goods arm sells products at 20-40% lower prices than competitors such as Coca-Cola, Mondelez, and Hindustan Unilever while offering better trade margins to gain market share quickly.