Mumbai/New Delhi, March 6 : Concerned over its sales slowing down, Reliance Retail Ventures Ltd (RRVL) is reportedly slashing jobs – along with other cost-cutting measures – before making its stock market debut.
The expansion of Reliance Retail in the past has apparently led to its valuation cut to $50 billion, half the amount at which it raised funds two years back.
It is now limiting expansion in a bid to boost valuations before its initial public offering kicks off, according to reports.
“The valuation cut, just as the conglomerate plans to list the retail unit does not bode well for early investors, especially when talks of buyback by marquee investors yielded little results,” NDTV Profit reported, citing a Bloomberg report.
The company is also limiting the presence of their physical stores, slashing marketing budgets and merging Reliance Brands Ltd, with its umbrella retail entity, the report mentioned.
In the third quarter of this fiscal (Q3 FY25), the retail unit’s total store count reached 19,102 and it recorded footfalls of nearly 30 crore, a 5 per cent year-on-year growth.
“The focus on scaling up digital commerce and new commerce continued with these channels contributing to 18 per cent of total revenue,” according to the company.
Reliance Retail Ventures clocked a 10 per cent increase in its consolidated net profit for Q3 FY25 at Rs 3,458 crore, compared to Rs 3,145 crore in the same period last year.
On a sequential basis, the net profit increased by 22 per cent, rising from Rs 2,836 crore reported in Q2 FY25.
Reliance Industries Limited Chairman and Managing Director Mukesh Ambani said that with customer-centric innovation at its core, the business constantly endeavours to enhance the shopping experience of its customers through its vast reach and a constantly expanding product basket.
Meanwhile, Jefferies has maintained its ‘buy’ call on Reliance Industries Ltd with a target price of Rs 1,660 per share. The stock assumes significance as it has fallen over 25 per cent since its peak last year. (IANS)