Reliance is looking forwards to establishing its ground in the field of retail. So, for that on Tuesday, Abu Dhabi Investment Authority (ADIA) became one of the eight investors in the Reliance Retail. ADIA decided to pick take around 1.2% equity in the company and agreed to sanction around a whopping Rs 5,512.5 crore. Indeed Rilance is an unstoppable force under Mukesh Ambani and now, is looking forward to the Retail Sector. At 8.48%, the Silver Lake, KKR, General Atlantic, Mubadala Investment Company, GIC, and TPG invested Rs 37,710 crores. Now, ADIA is the next to invest. Now, Reliance Retail has the closest rival as Avenue Supermart or DMart. A close study by USB says that Reliance will surpass Dmart.
Why USB Says That Reliance Retail Will Regin Supreme?
Reliance Retail is obtaining attention as it aggressively transforms its supremacy via JioMart. Also, there are analysts that have studied the various tactics and crunched up the numbers. The bell tolls and according to USB, Reliance Retail will pick up the win. Now, USB analysts believe that in order to maintain their position in the market, they will have to win their customer’s support. This means that DMart will have to re-orient their business strategies, increase the scale of their business, go for mergers, or cash-in on niche segments.
Now, the problem for DMart is also the COVID-19 situation. The social distancing, the worldwide lockdown, all are contributing factors towards the future loss of DMart. Hence, if the supermarket king has to remain on top, it will have to change its strategies. DMart will have to increase its presence online and get out to the customers. USB officials claim :
“We are lowering our PAT estimates for Avenue Supermarts by 36.8 per cent/13 per cent for FY21/FY22.” This is indeed a bold statement by the analysts which rolls in the favor of Reliance Retails. Further, the recent reports said :
“Our PAT estimates for Avenue are now 16.6 per cent/7.7 per cent below consensus estimates for FY21/FY22. For Reliance Retail, we raise our revenue estimates given the higher visibility of its e-commerce business ramp-up. However, we have reduced our forecast EBITDA margin given its increasing proportion of sales from the online channel.”
So, this is a win or lose situation for DMart as Reliance has the weapons and the capital. With the coming of ADIA as the eighth investor in Reliance Retails, the idea is bound for great heights, all thanks to Mukesh Ambani’s skills.