MUMBAI (Reuters) – Five years after making a grand foray into retail, Mukesh Ambani’s Reliance Industries is nowhere close to the scale he had hoped his company, India’s largest listed group, would achieve in a fragmented and fast-growing industry.
With retail giants Wal-Mart Stores Inc and Carrefour circling India in anticipation of a rule change that would allow foreign investment in supermarkets, Asia’s richest man is scrambling to capitalize on his early mover advantage.
Over the past few months, Reliance has accelerated store openings, brought in a management team from Wal-Mart China and launched wholesale operations that serve the small mom-and-pop players dominating the $450 billion Indian retail sector.
It has also rolled out its first large-format hypermarket outlets selling everything from food to furniture.
“In retail they are still a long way off,” said Michiel van Voorst, portfolio manager for Asia-Pacific equities at Robeco Hong Kong, which is considering buying into the stock it sold off three years ago, tempted by its 22 percent decline in 2011.
“The business will still require a lot of investments, and there is no synergy to any of other activities of the company,” said van Voorst, whose firm manages $2 billion in Asia.
Reliance battles the same problems that
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