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Retail Research

Why Reliance bought Future Retail in Largest Deal – Insider View

After getting series of funding into Akash Ambani run Jio Platforms, Reliance Industries CMD, Mukesh Ambani set his sight on his daughter Isha Ambani Piramal managed Reliance Retail Ventures Ltd .

Talks had progressed in the backstage between the Reliance Group & Kishore Biyani’s Future Group for quite sometime. Reliance through its newly formed group company Reliance Retail Ventures Limited will acquire Future Enterprise Ltd (Future Retail, Future Lifestyle Fashions, Future Supply Chain, Future Consumer, Future Market Networks would first be merged into Future Enterprise), on a slump sale basis for an enterprise value of Rs247 bn, subject to regulatory approvals. This marks a major consolidation in the Indian organized retail sector, with two of the top three players merging.

How Reliance Retail Compares with Future Retail Ltd (FRL) ?
Reliance Retail revenue in FY20 was Rs346 bn and that of Future Retail annualized revenue of FY20 (based on 9M FY20 results) was ~Rs100 bn. Future Retail has (more…)

Retail Research

How COVID-19 Impacts Indian Retail Chains ?

The once in a decade event “Viral Infection – COVID-19” is going to have an unprecedented impact on the organized retail traders in India. With lockdown impacting business completely in April & May and gradual recovery in June across the length and breadth of the country.

Titan’s revenues to be hit nearly ~65% in Q1FY21, along with significant hit to the margins. We anticipate the watches division to be impacted the most (~92% dip YoY), followed by eyewear (~85% dip) and jewelry (~70% dip; for the remainder of the year, we expect a gradual bounce back in jewelry demand to be spurred by festive buying, wedding / occasion-based purchases, which in our view will take time to manifest in revenues, additionally we would watch for commentary on (more…)

News & Views

BigBasket – India’s Online Grocer

Big Bsket - Online Grockery Shopping in IndiaThe total grocery business in India is US$150-200 bn and is growing 15% p.a. The top 10 cities account for about 30-40% of it. The largest offline grocers are Reliance Fresh, Future Group, and Aditya Birla. BigBasket is currently available in four cities – Bangalore, Hyderabad, Mumbai, and Pune – with 300,000 unique customers (50% of them in Bangalore). BigBasket.Com has recorded a 9% compound monthly growth rate since inception and has cumulatively serviced more than 2 mn orders.

The key advantages of online groceries (more…)

Retail Research

Indian Shopping Gradually Shifting from Unorganized to Organized / Modern Retail

Indian Retail Sector Shifting to Organized ShoppingUnorganised retail – the traditional retail format comprising kirana shops, mandi, local shops, hand crafts, pavement vendors etc – has a higher share in Indian retail, as majority sales originated from rural areas. However, organised / modern retail has posted a robust 27.4% CAGR over FY07-11 in India.

As per a recent CARE report, organized / modern retail could post 25.7% CAGR over FY12-15e. With this, the share of organised retail in overall sales could rise from 6.7% in FY12 to 8.8% in FY15e. Moreover, we believe the organised (more…)