The Mukesh Ambani-led Reliance has swiftly expanded the company’s authorized share capital in Reliance Consumer Products Ltd (RCPL) to Rs 10,000 crore. The move aims to boost the company’s FMCG business and challenge established players such as Hindustan Unilever (HUL), ITC, Coca-Cola, and Nestle. This strategic expansion marks Reliance’s bold entry into the consumer market.
RCPL authorised share capital hiked 100 times
RCPL’s authorised share capital, which was previously 100 crores, has now been increased 100 times, showed latest filings by the FMCG company to the Registrar of Companies (RoC). The latest step was implemented through a mix of 6 billion equity shares of Rs 10 each and 4 billion preference shares of Rs 10 each.
Mukesh Ambani plans to take on FMCG giants
The Fast Moving Consumer Goods business restructuring was executed with effect from December 1. RCPL was a direct unit of the RIL retail business holding company known as Reliance Retail Ventures (RRVL). So far, major established companies have dominated the FMCG sector. Reliance is now attempting to change this equation by bringing in massive capital and a supply chain.
FMCG brands transferred to new RCPL
The business restructuring involved the transfer of FMCG brands from Reliance Retail to parent RRVL under a slump-sale arrangement. The existing RCPL was merged with RRVL. Furthermore, the consolidated “consumer brands business undertaking” was separated from RRVL into the new RCPL.
Incidentally, the equity structure of RCPL remains the same as that of RRVL. Reliance Industries holds 83.56% of the shares, while the remaining are held by nine global investors, including KKR, Silver Lake, and Mubadala.
