Reliance Industries share price rises as RIL set to acquire in Metro AG’s India biz for Rs 2,850 crore Reliance Industries’ share price gained 0.5% to Rs 2,604 as RIL’s retail arm Reliance Retail Ventures Limited (RRVL) to acquire a 100% stake in Metro Cash and Carry for Rs 2,850 crore. The move will help the Mukesh Ambani-led giant to strengthen their position in India’s retail sector. The news comes days after the conglomerate’s retail arm announced the launch of their FMCG brand ‘Independence’. “Through this acquisition, Reliance Retail gets access to a wide network of METRO India stores located in prime locations across key cities, a large base of registered kiranas and other institutional customers, strong supplier network and some of the global best practices implemented by METRO in India,” Mukesh Ambani’s Reliance said in a statement. The acquisition will bolster Reliance Retail’s physical store presence and footprint, giving them the “ability to better serve consumers and small merchants by leveraging synergies and efficiencies across supply chain networks, technology platforms and sourcing capabilities,” Reliance said in a regulatory filing. Once certain regulatory and other customary closing conditions have been met, the transaction is expected to be complete by March 2023. Reliance Retail is India’s largest brick-and-mortar retailer, boasting of over 15,000 locations in more than 7,000 cities and the company is also the world’s fastest growing retailer. On Wednesday, RRVL announced a 2% stake sale in Just Dial to achieve minimum public shareholding as all the promoters combined hold 76.98% of the company since regulatory norms do not allow the total promoter holding to exceed 75%. “With Metro India, we are selling a growing and profitable wholesale business in a very dynamic market at the right time. We are convinced that in Reliance we have found a suitable partner who is willing and able to successfully lead Metro India into the future in this market environment,” said Steffen Greubel, Metro AG CEO.
If the current trend continues for a longer period of time, not only oil mills but oilseeds growers will also not be able to get good rates of their produce, says Samir Shah, president of Gujarat State Edible Oils and Oil Seeds Association (GEOA). Shah who is also past president of SOMA says that due to various international factors rates of edible oils had gone up considerably, especially imported oils earlier this year.
“With a view to curb rising prices of edible oil, the Government of India reduced import duty on edible oils. Considering the fact that India is producing hardly 30 percent of its edible oil requirement, the decision was right at that point of time. Now when international prices of edible oils have gone down by 15 percent to 25 percent and high production period has started in edible oil exporting countries, the government should gradually increase import duty to protect local oil mills and oilseeds growers,” said Shah. GEOA has also made representation before Union Minister for Commerce & Consumer Affairs, Piyush Goyal to increase import duty.
In June import duty on edible oils was ranging from 35 to 55 percent, since then the government gradually reduced import duty and at present it is ranging from zero percent to 15 percent on different edible oils, he said.
Just a month back prices of edible oils were through the roof and the government took appropriate measures by reducing import duty in order to protect consumers, says Atul Chaturvedi, president of Solvent Extractors Association of India (SEA). “Prices of edible oils are coming down globally. Kharif sowing has already started across the country. In the interest of local farmers, it is high time to enhance import duty in a phased manner to encourage local edible oil value chain,” opined Chaturvedi.
On Thursday imported Palm oil prices were at around Rs 2100 per 15 kg as against local Rs 2700 and Rs 2550 of groundnut and cottonseed oils. Prices of other local oils including ricebran, coconut, soyabean and mustard remained as high as Rs 2350, Rs 2520, Rs 2500 and Rs 2580 respectively.
India imports around 13-13.5 million tonnes of edible oils, of which around 8-8.5 million tonnes (around 63 per cent) are palm oil. Though the price of other imported Sunflower oil remained at around Rs 2700 per 15 kg, but import quantity of the oil is much lower than that of palm oil.