Reliance Industries Acquires Maharashtra's Largest Industrial Land Parcel for ₹2,200 Crore

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In a landmark transaction, Reliance Industries Limited (RIL), under the leadership of Mukesh Ambani, has acquired a 74% equity stake in Navi Mumbai IIA Pvt. Ltd. (NMIIA) for ₹1,628.03 crore, effectively valuing the entire entity at ₹2,200 crore.

This strategic acquisition grants RIL control over Maharashtra's largest industrial land parcel, encompassing over 5,286 acres in a prime location near Navi Mumbai.

Key Details of the Transaction

The acquisition was executed through Dronagiri Infrastructure Pvt. Ltd. (DIPL), a subsidiary of Urban Infrastructure Holdings Pvt. Ltd. (UIHPL). DIPL sold its 74% stake in NMIIA to RIL, with the transaction pricing each share at ₹28.50.

The City and Industrial Development Corporation of Maharashtra Ltd. (CIDCO), which holds the remaining 26% stake in NMIIA, waived its right of first refusal, facilitating RIL's entry.

Strategic Importance of the Land

The expansive 5,286-acre industrial zone is strategically situated near several critical infrastructure projects:

- Navi Mumbai International Airport: Proximity to this upcoming airport enhances the area's connectivity and potential for industrial and commercial activities.

- Jawaharlal Nehru Port: As one of India's major ports, its closeness offers significant logistical advantages for manufacturing and export-oriented businesses.

- Mumbai Trans Harbour Link (Atal Setu): This bridge will further improve accessibility between Mumbai and Navi Mumbai, boosting the region's attractiveness for industrial development.

- Mumbai-Pune Highway: Easy access to this major highway facilitates efficient transportation of goods and resources between two key economic hubs.

These infrastructural elements collectively enhance the economic potential of the acquired land, positioning it as a pivotal industrial and logistical hub.

Financial Details and Capital Redistribution

Following the transaction, UIHPL has proposed a substantial capital reduction, planning to distribute ₹3,746.87 crore to its shareholders. This distribution includes:

- Equity Shares and Compulsorily Convertible Preference Shares (CCPS): Shareholders are set to receive ₹1,492.50 crore.

- Optionally Fully Convertible Debentures (OFCDs): Redemption of ₹682 crore held by Vinamra Universal Traders Private Limited, a subsidiary of DIPL.

Promoters have already received contributions totaling ₹1,597 crore, indicating a structured approach to capital redistribution post-acquisition.

Ownership Structure and Funding

Prior to the acquisition, UIHPL's ownership was divided among:

- Reliance Group: 33% stake.

- Jai Corp Group (led by Anand Jain): 32% stake.

- SKIL Infrastructure: 35% stake.

RIL's acquisition of NMIIA aligns with its strategic interests, consolidating its presence in the industrial real estate sector. As of December 2022, NMIIA had received approximately ₹3,100 crore in equity and share application money, along with ₹6,038 crore in deposits, underscoring significant financial backing.

Reliance Industries’ Statement

RIL has clarified that this transaction does not constitute a related-party deal, emphasizing that no promoters or group companies had any conflict of interest. This transparency underscores RIL's commitment to corporate governance and ethical business practices.

Implications of the Acquisition

This acquisition significantly bolsters RIL's foothold in a prime industrial and logistical hub, offering potential long-term benefits as surrounding infrastructure projects reach completion. The strategic location and scale of the land provide RIL with opportunities to expand its industrial operations, potentially attracting ancillary industries and contributing to regional economic growth.

Conclusion

Reliance Industries' acquisition of a majority stake in NMIIA marks a strategic expansion into Maharashtra's industrial sector. The 5,286-acre land parcel's proximity to key infrastructure projects enhances its value, aligning with RIL's long-term vision for growth and diversification. As infrastructure developments progress, this acquisition is poised to play a crucial role in shaping the industrial landscape of the region, reinforcing RIL's position as a leading conglomerate in India's economic development.