Reliance Infrastructure Expands into Real Estate with New Subsidiary Reliance Jai Properties
News Mania Desk/Agnibeena Ghosh/13th August 2024
Reliance Infrastructure Limited has announced a strategic expansion into the real estate sector with the launch of its new subsidiary, Reliance Jai Properties Private Limited (RJPPL). This move, detailed in an exchange filing on August 12, 2024, marks a significant step for the company as it diversifies its business operations.
Reliance Jai Properties has been established as a wholly owned subsidiary of Reliance Energy Limited, which is itself a subsidiary of Reliance Infrastructure. The new entity has been incorporated with an initial capital of ₹1,00,000, divided into 10,000 equity shares priced at ₹10 each. Despite being newly formed, RJPPL is poised to engage in various real estate activities, including the acquisition, sale, lease, and development of properties.
The decision to venture into the real estate sector comes as India’s property market is witnessing substantial growth. Driven by factors such as urbanization, increased income levels, and supportive government policies, the sector presents lucrative opportunities for expansion. Reliance Infrastructure aims to leverage these opportunities to further diversify its revenue streams and tap into the booming real estate market.
On August 11, Reliance Infrastructure’s share price closed at ₹225.85 on the Bombay Stock Exchange (BSE), reflecting a 1.80 percent decline from the previous trading day. The company currently boasts a market capitalization of ₹8,946.62 crore. Its share price had reached a 52-week high of ₹308 on April 4, 2024, indicating fluctuating market conditions.
The move into real estate aligns with broader industry trends and government initiatives that are shaping the Indian real estate landscape. The Pradhan Mantri Awas Yojana (PMAY) is a notable example, with a goal to construct 20 million affordable housing units by 2022. As of 2023, approximately 11.4 million houses have been sanctioned, and 9.71 million have been completed or delivered.
Additionally, the Indian government has committed ₹48,000 crore (approximately $6.5 billion) to develop 100 smart cities across the country. By 2023, over 7,900 projects worth ₹1.93 lakh crore (about $26 billion) had been tendered, with more than 4,700 projects worth ₹93,500 crore (around $12.6 billion) completed.
Infrastructure investment also remains a priority, with roads and highways receiving the largest share of the budget, followed by railways and urban public transport. The government’s ambitious infrastructure goals include developing a 200,000-kilometer national highway network by 2025, expanding the number of airports to 220, making 23 waterways operational by 2030, and establishing 35 Multi-Modal Logistics Parks (MMLPs). The budget for infrastructure-related ministries has increased from approximately ₹3.7 lakh crore in FY23 to ₹5 lakh crore in FY24, offering significant investment opportunities for private sector players.
