Big Shift: Reliance Transfers Consumer Business to New RCPL

As the oil-to-telecom giant founded by billionaire Mukesh Ambani prepares for an IPO for its retail division, Reliance Industries Ltd. is moving all of its consumer products brands to a new wholly owned company.

According to a June 25 National Company Law Tribunal order, the brands—which include clothing, fashion, food, personal care, and beverages—that are presently owned by Reliance Retail Ltd. (RRL), Reliance Retail Ventures Ltd.(RRVL), and Reliance Consumer Products Ltd.(RCPL) will be transferred to the so-called New Reliance Consumer Products Ltd., or New RCPL.

In their application with the NCLT, the Reliance firms stated that, in contrast to retail, this is a major operation that requires specialised and concentrated attention, experience, and diverse skill sets.

According to the filing, the change will enable the capital-intensive consumer goods company to draw in a new group of investors. Additionally, it will help the retail company that is getting ready for an IPO focus more intently.

Operations of New RCPL

As per the agreement, New RCPL would produce, market, sell, and distribute consumer goods. According to the NCLT filing, it will also make investments in joint ventures and subsidiaries associated with this enterprise.

This development coincides with experts pointing to signs of improvement in Reliance's retail division following a poor year-end performance on March 31 brought on by a slowdown in consumption and a reorganisation of its store network.

Just two years after its reintroduction in India, Reliance's beverage brand Campa Cola acquired double-digit market share in strategic regions.

Its network of beauty care products, Tira, includes the Korean brand Sulwhasoo, the American brands Smashbox and Estee Lauder, and the domestic upstart Re'equil.

Reorganisation to be Concluded in Four Stages

There will be four main stages to the restructuring. Through slump sale, RRL's FMCG brands will first go to parent RRVL. After that, RCPL and RRVL will merge.

The combined "consumer brands business undertaking" will thereafter depart from RRVL and relocate to Tira Beauty Ltd., which is now a dormant business.

As a continuing business, Tira Beauty will then be referred to as New Reliance Consumer Products (New RCPL). To have the proposed "composite scheme of arrangement" approved, the Mumbai NCLT bench directed RRVL to schedule meetings with its 14 equity owners and creditors.

Meetings for RRL, RCPL, and Tira Beauty shareholders were judged unnecessary based on the consent affidavits that were presented. According to the corporation, over 60% of the INR 11,500 crore in sales in FY25 came from kiranas and general trade.

Campa achieved double-digit market share in some regions, according to the company's results call. Its goods are available in over one million retail locations through a distribution network that includes over 3,200 partners.

In addition, the NCLT division bench, which included technical member Prabhat Kumar and Justice VG Bisht, directed the firms to furnish information on their performance and corporate guarantees as well as any contingent liabilities that may be in place.