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Reliance Lent Buyer Funds for Subsidiary Deal?
5 Jun
Summary
- Reliance lent Jaipur Enclave ₹273.75 crore in convertible debt.
- Jaipur Enclave acquired a Reliance subsidiary for ₹274 crore.
- The funding arrangement has raised questions about related-party transactions.
Reliance Industries Ltd is under scrutiny following a ₹274-crore sale of its subsidiary, Reliance Projects & Property Management Services Ltd (RPPMSL), to Jaipur Enclave Pvt. Ltd in April. Further investigation revealed that Reliance Eminent Trading & Commercial Pvt. Ltd, a Reliance subsidiary, lent ₹273.75 crore to Jaipur Enclave through optionally fully convertible debentures (OFCDs).
This fund infusion, nearly matching the acquisition price, suggests a possible funding mechanism for the transaction. Jaipur Enclave, which had minimal revenue and a net loss in the fiscal year ended March 2025, acquired RPPMSL, a profitable entity. This sequence of transactions has ignited governance questions concerning related-party dealings.
Reliance Industries, which initially described Jaipur Enclave as an unrelated party, had previously held a significant stake in it until March 2023, classifying it as an associate firm. The funding for the loan originated from Reliance Industries itself, channeled through several step-down subsidiaries via OFCDs in a coordinated sequence on April 30. Legal experts note that such circular funding arrangements, even if technically compliant, warrant in-depth scrutiny under Sebi's anti-abuse provisions.
