Reliance’s ₹1,645 Crore Investment in Dunzo Now Valueless

Reliance Industries Ltd. (RIL) has written off its entire investment in quick-commerce startup Dunzo Digital Pvt., marking a significant financial setback in its retail expansion strategy. The conglomerate confirmed that the stake, earlier valued at ₹1,625 crore, is now considered worthless. Dunzo has also ceased to be a related party during the financial year.

In late 2023, Reliance Retail had acquired a 25.8% stake in Dunzo for $200 million (about ₹1,488 crore) through compulsorily and optionally convertible preference shares. At the time, the move was aimed at bolstering RIL’s grocery delivery operations and expanding its hyperlocal commerce network.

Strategic Intent Behind the Dunzo Investment

When announcing the partnership, Isha Ambani, Director of Reliance Retail, highlighted the potential for enhancing consumer convenience and offering rapid delivery of products from Reliance Retail stores. She noted that the collaboration was intended to give merchants access to Dunzo’s hyperlocal delivery network, enabling them to scale their online business through JioMart.

Despite the initial optimism, Dunzo has faced severe financial and operational hurdles in recent months, leading to Reliance’s decision to write down the investment.

Reliance Retail’s Q1 Financial Performance

Reliance Retail Ventures Ltd. (RRVL) reported a decline in its first-quarter performance for FY25.

• Net profit: ₹3,271 crore, down 7.7% from ₹3,545 crore in the previous quarter.

• Revenue: ₹84,172 crore, a 5% drop from ₹88,637 crore in Q4 FY24, missing Bloomberg’s analyst consensus estimate of ₹85,111 crore.

• EBITDA: ₹6,381 crore, down 5% from ₹6,721 crore, below expectations of ₹6,652 crore.

• EBITDA margin: Stable at 7.58%.

Reasons Behind the Decline

The primary drag on performance came from the consumer electronics and devices segment, particularly air-conditioner sales, which were hit by the early arrival of the monsoon season. However, the company expressed confidence in recovery during the coming quarters.

Despite the slowdown, Reliance Retail continued its expansion, opening 388 new stores in the quarter. The total retail network now stands at 19,592 stores, covering 77.6 million sq ft of retail space as of June 2025.

Retail Growth and Expansion Plans

Isha Ambani stated that RRVL’s resilient performance was supported by operational excellence, geographical reach, and a refined product portfolio. The company continues to invest in cutting-edge technologies and innovative products to enhance customer experience and scale operations efficiently.

Reliance’s consumer products business, which includes brands like Campa and Independence, achieved ₹4,400 crore in sales during the quarter.

E-commerce and JioMart Growth

JioMart recorded a 68% quarter-on-quarter growth in daily orders. It now operates across 4,290 pin codes, supported by more than 2,200 stores in over 1,000 cities.

The company is also in the process of demerging its FMCG business into a new entity, New Reliance Consumer Products Ltd., with completion expected later this year, pending regulatory approvals.

Category Diversification and Partnerships

Reliance Retail has been expanding into non-apparel categories such as footwear, beauty, personal care, and accessories to offer broader product choices.

In February 2025, the company announced a partnership with Shein to reintroduce the brand to India. Although marketing efforts are still minimal, the collaboration has already attracted significant consumer interest, with over two million app downloads reported.

Outlook

While the write-off of the Dunzo investment marks a setback in RIL’s quick-commerce ambitions, Reliance Retail’s diversified portfolio, store expansion, and strong e-commerce growth position it for long-term resilience. The company’s focus on technology-driven retail experiences and strategic partnerships indicates continued commitment to innovation and market leadership in India’s retail sector.