Reliance Retail seeks to double borrowing cap to Rs 1 lakh crore: Report

Reliance Retail is all set to give a boost to its expansion plans. The company has reportedly sought the approval of its shareholders to increase its borrowing cap to Rs 1 lakh crore from Rs 50,000 crore. As per a report in The Economic Times, Reliance Retail will take approval from its shareholders for the same during its 30 September annual general meeting. The company had invested Rs 30,000 crore in 2021-22 to increase the number of stores, further strategic partnerships as well as acquisitions. As per its expansion plans, Reliance Retail aims to establish more than 2,000 physical stores annually. What will the increase in borrowing cap accomplish? The increase in borrowing cap will allow Reliance Retail to raise up to Rs 60,000 crore as debt. The company’s borrowings stood at Rs 40,756.44 crore as on 31 March 2022. Out of the total, Rs 12,021 crore were long-term borrowings, while Rs 28,735.44 crore were in the form of short term loans. The increase of the borrowing cap will allow Reliance Retail to proceed with its growth and expansion plans smoothly. According to what founder of business intelligence firm AltInfo, Mohit Yadav, told Economic Times, the proposed doubling of the borrowing cap indicates that the company could be looking to borrow more. “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,” he said. “The substantial increase in borrowing limit shows that they are looking at borrowing further for expansion and operational expenses,” Yadav added. Performance of Reliance Retail: The company, in its annual report, stated that its merchant partner base tripled last year in terms of B2B sales digitally. Reliance Retail has over 193 million customers and a total count of 14,385 stores. The company recorded a net profit of Rs 4,934 crore for 2021-22, while its standalone revenue rose 29 percent year-on-year at Rs 1,93,456 crore. Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Firstpost Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.