Reliance Retail to seek doubling of borrowing limit to Rs 1 trillion

To boost its growth and expansion, Reliance Retail has reportedly sought shareholders' approval to increase its borrowing limit from Rs 50,000 crore to Rs 1 trillion. According to a report by Economic Times (ET), the company borrowed Rs 40,000 crore in FY22.

According to the company's annual reports, the company will seek shareholders' approval in the September 30 Annual General Meeting (AGM), ET reported.

In its AGM in August, Reliance stated that Reliance Retail will start its FMCG business and set up over 2,000 brick-and-mortar stores annually.

According to ET, out of Rs 40,000 crore, long-term borrowings accounted for Rs 12,021 crore on long-term borrowings and Rs 28,735 crore on short-term loans. Also, Rs 30,000 crore was spent on expanding its store presence.

"Considering that the bulk of the existing debt is short-term which needs to be repaid within a year, it is possible that Reliance Retail may be looking to refinance the short-term loans to ease the cash flow," an expert told ET.

In 2021, Reliance Retail sought shareholders' approval to borrow Rs 50,000 crore in a year.

Reliance Retail's standalone revenue for 2021-22 stood at Rs 1.9 trillion, up 29 per cent year-on-year. The net profit was recorded at Rs 4,934 crore. The EBITDA was at an all-time high of Rs 10,365 crore.

The company currently has over 14,385 stores in India. In the last financial year, the company doubled its warehousing and fulfilment capabilities. The company has 193 million registered customers.