Reliance Retail to demerge FMCG business to boost growth

Mumbai, July 19, 2025 — In a significant move aimed at unlocking shareholder value and enhancing operational agility, Reliance Retail Ventures Ltd (RRVL), the retail arm of Reliance Industries Ltd (RIL), has announced its decision to demerge its fast-moving consumer goods (FMCG) business into a separate entity. The restructuring is expected to give a focused thrust to its ambitious FMCG foray under the “Independence” brand and streamline its vast portfolio of operations.

The board of RRVL approved the demerger proposal in a meeting held this week. The move, subject to necessary regulatory approvals and shareholder consent, is seen as a strategic play to position the FMCG vertical as a standalone powerhouse, akin to industry majors like HUL, Nestlé India, and ITC.

A Bold Step to Scale FMCG Operations

Reliance Retail launched its FMCG business in late 2022 under the brand name “Independence” with the vision to offer affordable, high-quality consumer goods spanning food, home, and personal care categories. The demerger will now give this segment its own balance sheet, leadership, and strategic direction.

A Reliance spokesperson said, “The demerger will enable sharper execution, independent capital allocation, and the ability to pursue acquisitions, innovation, and product development with greater autonomy.”

Since its inception, the FMCG arm has made aggressive moves — acquiring iconic local brands like Campa Cola, Raskik, Sosyo, and Lotus Chocolates, and rapidly expanding its distribution reach through JioMart, kirana partnerships, and modern trade outlets.

Analysts Weigh In

Market analysts view the move as a strategic masterstroke. Devang Mehta, Head of Equity Advisory at Centrum Broking, stated:
"This demerger is more than a corporate formality — it's Reliance signaling its serious intent to disrupt the FMCG market. A focused FMCG entity can build its brand, scale operations, and potentially list independently in the future."

Rajiv Sharma, Retail Analyst at HSBC India, added, “Reliance has the muscle in distribution, data, and capital. With a leaner structure, the new FMCG entity can better compete in pricing, penetrate rural markets, and incubate new-age brands.”

Competitive Landscape and Market Potential

India’s FMCG market, estimated at over $110 billion in 2024, is expected to grow at a CAGR of 9–10% through 2030, fueled by rising incomes, urbanization, and premiumization. While the space is dominated by legacy giants like HUL, ITC, and Dabur, Reliance’s entry is altering the dynamics.

Leveraging its extensive supply chain, technology backbone via Jio platforms, and retail reach — spanning over 18,700 stores and millions of kiranas — Reliance has the potential to disrupt incumbents through pricing power and deep consumer insights.

A focused FMCG unit could also raise targeted capital, attract specialized talent, and drive faster decision-making. As per sources, the demerged entity could explore private equity or strategic investments in the near future.

Boost to Shareholder Value

Reliance’s demerger strategy aligns with its broader blueprint of simplifying business structures and unlocking value. In the past, RIL has successfully demerged and listed verticals — most notably Jio Financial Services in 2023.

"The market rewards clarity," said Ramesh Damani, veteran investor and BSE member. "By carving out FMCG into a standalone entity, Reliance can provide transparent valuation metrics, attract sector-specific investors, and pave the way for an eventual IPO, which could be a wealth creation opportunity."

Investor Outlook

The demerger is expected to be value accretive in the medium to long term. While the timeline for listing the new FMCG entity has not been disclosed, market participants expect the process to be completed over the next 12–18 months.

RIL shares closed 1.2% higher on the BSE at ₹3,215 on Friday, reflecting positive investor sentiment. Brokerages believe the restructuring could act as a trigger for re-rating RRVL’s valuation ahead of its much-anticipated public listing.

Investors are advised to watch for regulatory filings detailing the share swap ratio, valuation estimates, and timeline of the demerger. Mutual funds and institutional investors with exposure to Reliance Retail will likely benefit from the upside potential of a standalone FMCG play.

What Lies Ahead

Reliance’s aggressive push into consumer brands is part of a broader vision to diversify away from hydrocarbons and establish leadership in high-growth sectors — retail, telecom, and now FMCG. With its capital strength, execution capabilities, and strategic clarity post-demerger, the FMCG business could emerge as a formidable player in the consumer goods space.

As the Indian consumer market matures and shifts towards branded, value-based consumption, Reliance’s FMCG pivot seems well-timed — and now, structurally well-aligned.