Top 5 Companies Acquired by Reliance Industries

Ever noticed how Reliance keeps making headlines? It introduced Jio and is now leading in the Indian telecom sector. Similarly, it started Trends and became a well-known name in the retail industry.

But do you know what else Reliance does very well? Strategic acquisitions!

Over the years, this conglomerate has expanded its presence across different sectors, such as healthcare, FMCG, retail, and even entertainment. And guess what? Most of the listed companies RIL are its acquired companies. Want to know about these companies? Read our article Mukesh Ambani’s Listed Reliance Companies.

Back to the topic at hand, Reliance Industries has a reputation for entering a market and instantly leading it. This applies to both Swadeshi and international markets. And most of its success comes from its acquired companies.

Speaking of acquisitions, today, we’ll be discussing the companies Reliance has acquired, why it has done it, and so on. So, without further ado, let’s get started!

Table of Contents:

• Netmeds
• Lotus Chocolate Company Ltd.
• Hamleys
• JioSaavn
• Campa Cola

Netmeds

Founded in 2015, Netmeds Healthcare Limited emerged as a prominent player in India's pharmaceutical retail sector. Initially focused on providing business consultancy, technical services, and doctor consultations, Netmeds also expanded into diagnostics and customer subscriptions.

In August 2020, Reliance Retail Ventures Limited (RRVL) acquired a 60% stake in Vitalic Health Pvt. Ltd., the parent company of Netmeds, for ₹620 crores. The acquisition included full ownership of subsidiaries like:

• Tresara Health Pvt. Ltd.
• Netmeds Marketplace Ltd.
• Dadha Pharma Distribution Pvt. Ltd.

Reliance acquired Netmeds for several reasons:

• RIL aimed to strengthen its position in the healthcare sector and enhance its ability to offer affordable healthcare products and services to millions of Indian households.
• Netmeds aligned perfectly with Reliance's goal of expanding its digital commerce portfolio into healthcare affordability.
• With the launch of 'Amazon Pharmacy' by Amazon India and the entry of other competitors, this acquisition strengthens Reliance's foothold in the evolving digital pharmacy market, providing a competitive advantage in this rapidly expanding sector.

While the handover ceremony, Ms. Isha Ambani, Director of RRVL, said,

“This investment is aligned with our commitment to provide digital access for everyone in India. The addition of Netmeds enhances Reliance Retail’s ability to provide good quality and affordable health care products and services, and also broadens its digital commerce proposition to include most daily essential needs of consumers.”

Netmeds has now built a network of over 1,000 stores strategically located in Tier 1, 2, and 3 cities, offering significant scalability. By leveraging Reliance's resources, Netmeds can now accelerate its growth and deepen its market presence. So, it's a win-win for both partners.

Lotus Chocolate Company Ltd.

Now, I know it's quite confusing for you to hear Reliance and Chocolate together. You must probably be thinking,

However, Reliance did acquire a chocolate brand to expand its footprint in the FMCG sector. Reliance Consumer Products Ltd. (RCPL), a subsidiary of Reliance Retail Ventures Ltd. (RRVL), acquired a 51% stake in LCCL for ₹74 crore. With this, it gained sole control of the company on 24 May 2023.

Established in 1988, Lotus Chocolate Company Ltd. (LCCL) is one of India's prominent players in the chocolate manufacturing sector/industry. Known for producing high-quality cocoa products, chocolates, and cocoa derivatives, LCCL caters to renowned brands like Amul, Mother Dairy, and Parle Products.

So, why did Reliance acquire LCCL? Well, there were several reasons:

• This acquisition is a strategic move for Reliance Retail Ventures Ltd. (RRVL) to strengthen its position in the confectionery market, making it a competitor to industry leaders like Nestlé India and Britannia Industries.
• Reliance also saw growth potential with this acquisition. This merger was expected to drive revenue through new product segments and enhanced capacity utilisation.

Due to intense competition from giants like Cadbury, Nestlé, and Mondelez, and fluctuations in the prices of raw materials like cocoa, sugar, and dairy products, LCCL is struggling to maintain a profit. As these costs increase, consumer margins are affected. Do you think it will continue? Or will LCCL be able to come out of this? Let us know in the comments.

Hamleys

With a legacy spanning over 250 years, Hamleys of London is celebrated as “The Finest Toy Shop in the World.” Established in 1760 by William Hamley under the name Noah's Ark, the brand evolved into a global icon, renowned for its enchanting retail experience and extensive collection of toys and games.

To bring its magic to India, Reliance signed a franchise agreement with Hamleys in 2010. Under this franchise, Reliance operated 88 stores across 29 cities in India. This franchise established a very significant and profitable business in toy retailing in India.

However, in 2019, Reliance Brands Limited acquired 100% stakes in Hamleys for £68 million (approximately ₹620 crore) in an all-cash transaction!

But what was the need for this acquisition when Reliance was already doing well in this franchise agreement? Well, there were several factors.

While Hamleys was enjoying significant success in India, it was struggling to make profits in its franchises outside of India. Reliance recognised this problem and decided to seize the opportunity:

• Because of Hamleys' franchise, Reliance Retail was doing a profitable business and had a great sales network in India. However, it lacked recognition at a global level.
• Reliance also aimed to compete directly with big names like Amazon and Walmart.
• Plus, Hamleys was already at a loss. This acquisition, with its 167 stores from 18 countries, gave Reliance a chance to get the recognition it desired.

Needless to say, this acquisition turned out to be profitable for Hamleys’ overall business. Even though its profits decreased from £4,523 in 2022 to £3,606 in 2023, the company is still doing well in terms of profitability.

You must be wondering, “How is that possible?” Well, revenue alone cannot tell a company's overall profitability. There are many other factors. We've covered them in our article Reliance Companies by Profitability: Who Leads and Who Lags?

JioSaavn

Remember the time when Spotify decided to betray its free users by taking away the rewind, scrub or repeat songs features? That's when the majority of people decided to switch to JioSaavn. Looks like this kind of situation was what Reliance might have bet on while acquiring this company.

JioSaavn is one of India's leading music streaming platforms and a digital distributor of music in Hindi, English, Marathi, Bengali, and other regional languages. Founded in 2007 as Saavn, the company has acquired rights to over 36 million (36 lakh) music tracks in multiple languages.

On 23 March 2018, Reliance acquired Saavn for ₹805.84 crore with a 41.1% stakes in the company. On the occasion, Akash Ambani, Director of Reliance Jio, added;

“The investment and combination of our music assets with Saavn underlines our commitment to further boost the digital ecosystem and provide unlimited digital entertainment services to consumers over a strong uninterrupted network”

Later, Reliance transferred its music streaming service, JioMusic, to Saavn India via a slump exchange. After this merger, Reliance's equity stake in the combined entity increased to 81.7%.

But why did Reliance show interest in Saavn? Well, there were several reasons for that:

• By combining JioMusic with Saavn, Reliance created an extensive music streaming service, appealing to its large Jio user base.
• Further, this merger strengthened its position in India's digital music space when global competitors like Spotify were slowly entering the market (2019).

Saavn Limited Liability Company's (name used for administrative purposes) strong presence in the US provided RIL an opportunity to expand internationally, taking Indian music to a global audience.

Campa Cola

Our generation probably doesn't know about Campa Cola, but the previous generation was totally hooked on it! Campa Cola was a big thing back in the '70s and the '80s. With its slogan, “The Great Indian Taste,” Campa Cola appealed to national pride, capturing the hearts of Indian consumers.

It was launched in the 1970s by the Pure Drinks Group, founded by Mohan Singh. During the 1970s and 1980s dominated the Indian soft drink market as it had minimal foreign competition. It used to offer variants such as Campa Orange and Rush.

But things started going south for the company after the liberalisation of the Indian economy. The early 1990s brought global giants like Pepsi and Coca-Cola to India. This increased competition led to a sharp decline in Campa Cola's market share.

By 2000-2001, the bottling plants ceased operations, and by 2009, Campa Cola was nearly forgotten, with only minimal production in Haryana. However, times changed for Campa Cola, and it was acquired by Reliance in 2022 for ₹22 crore, aiming to revive the iconic Indian brand. Reliance did it because for several reasons:

• This acquisition was part of a broader strategy to establish a strong foothold in the FMCG sector, focusing on regional and legacy brands.
• Reliance aims to directly compete with beverage giants like Coca-Cola and PepsiCo, challenging their dominance in the Indian market.

Also, Reliance strategically plans to distribute Campa Cola through its vast retail network, including:

• Reliance Retail stores
• JioMart and

• Local kirana stores

Reliance Consumer Products Ltd. (RCPL) officially relaunched Campa Cola on March 9 2023, and this time, with three flavours- cola, orange, and lemon. According to this article from The Economic Times, RCPL generated a revenue of ₹1,000 crore. Out of which, Campa Cola alone contributed ₹400 crore.

Conclusion

Reliance has been expanding its empire with acquisitions and these are not just any regular acquisitions. With its unconventional pricing strategies and a keen eye for untapped potential, Reliance has proved that it has the capability to beat international giants like Spotify, Walmart, Coca-Cola, and Pepsi.

What started as a humble yarn trading business in Mumbai by Dhirubhai Ambani has turned into a successful conglomerate with a valuation of approximately ₹16 lakh crore. And some of its companies are generating a great market cap! Wanna know about these companies? Then, read our article on 8 Leading Reliance Companies by Market Capitalisation.

Oh, by the way, did you notice that 4 out of the 5 companies that we mentioned in this article were acquired by Reliance Retail? Does that mean Reliance is focusing more on expanding its presence in the retail sector? What do you think? Let us know in the comments. 👇🏻

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