Mumbai/ Bengaluru: Reliance Industries Ltd channelled money to a small firm with no business operations of its own likely to fund the acquisition of a third-layer step-down subsidiary of the country’s most valuable company.
Reliance Industries has so far described the deal as a non-related-party transaction.
Under the transaction, Reliance Retail Ltd sold a subsidiary called Reliance Projects & Property Management Services Ltd (RPPMSL) to Jaipur Enclave Pvt. Ltd in April for ₹274 crore. Privately held Reliance Retail is a subsidiary of Reliance Retail Ventures Ltd, which in turn is a subsidiary of Reliance Industries.
On 30 April, 17 days after the deal was announced by Reliance, Jaipur Enclave issued ₹273.75 crore worth of optionally fully convertible debentures (OFCDs) to a wholly owned stepdown subsidiary of the conglomerate, Reliance Eminent Trading & Commercial Pvt. Ltd, regulatory filings showed.
An OFCD is a quasi-equity instrument wherein the subscriber has the right to convert debt into equity at a pre-decided price.
The fund infusion of an amount identical to the acquisition cost of RPPMSL points to a means to fund the transaction, though Mint could not verify if Jaipur Enclave has since used this money to pay Reliance Retail.
The ₹274-crore sale consideration was small compared to the scale of the sold unit. RPPMSL, set up in 2019, reported ₹379 crore in profit on ₹9,323 crore revenue in the year ended March 2025, according to its financials. Purchaser Jaipur Enclave had zero revenues and a loss of ₹1.92 lakh the same fiscal with cash and cash equivalents of ₹4.41 lakh.
After the transaction, RPPMSL ceased to be a subsidiary of Reliance.
A report by Mint in early May had flagged how the deal had (RPTs) and consequent governance questions. RPTs attract extra scrutiny due to the inherent conflict of interest between the buyer and the seller. This ₹274 crore sale does not trigger the Securities and Exchange Board of India’s (Sebi) listing obligation and disclosure rules that require listed companies to seek shareholder approval for RPTs that either exceed ₹1,000 crore in value or 10% of the annual consolidated turnover.
Reliance Industries did not respond to Mint’s queries on the transactions. Neither did Mint get a response from Praveen Baser and Riya Lakhotia, the two directors of Jaipur Enclave while also being employees of the Reliance Group.
The deal trail
How did Reliance Eminent get the ₹273.75 crore to lend to Jaipur Enclave? It borrowed it from its parent company Reliance 4IR Realty Development Ltd by issuing OFCDs. And this company in turn borrowed the money from its parent company Reliance Industries, the country’s No.1 company by market capitalization of ₹18 trillion. Reliance Industries invested ₹1,300.2 crore in Reliance 4IR Realty Development by subscribing to OFCDs.
All the transactions were conducted in a coordinated sequence on 30 April, according to recent disclosures made by these private companies to the ministry of corporate affairs.
In other words, Reliance Industries routed money through three transactions with related companies—and this money was then likely used to buy its unit two times removed.
As , Jaipur Enclave, which was described as an unrelated party by Reliance Industries, was a former associate company of Reliance Industries. An associate firm is one in which a company controls, directly or through subsidiaries, a stake between 20% and 50%.
Reliance Industries controlled 20% in Jaipur Enclave until March 2023 via Reliance Eminent. The stake was later pared to 4.76% and it stopped being an associate firm, technically making it an unrelated party. It retained the same registered address as Reliance Retail.
If Reliance Eminent converts the OFCDs into equity, its stake in Jaipur Enclave will cross 99%, bringing the firm back into the fold of Reliance Industries.
Governance concerns
Board meetings across multiple Reliance subsidiaries on the same day to approve the fund raise structured across three transactions is a governance red flag, according to one lawyer.
Under Sebi’s listing obligations and disclosure requirements (LODR) norms, “looking at the transaction in isolation is no longer legally tenable,” said Ankita Singh, managing partner at Delhi-based Sarvaank Associates. “This circular, net-zero cash loop triggers the anti-abuse provisions of applicable Sebi LODR regulations, shifting the mandate from a simple disclosure to a strict requirement for in-depth scrutiny and arm’s-length validation.”
On paper, the transaction may seem a technical non-relationship, “but when a listed group’s subsidiary injects exactly the same amount via convertible debentures into an entity to fund that very entity’s purchase of a group asset of the same amount, the corporate veil dissolves,” Singh added.
Before details of the funding came to light, Mint had reported legal and governance experts saying the deal tested the on related-party transactions, even while technically complying with the rules.
When Reliance Retail sold RPPMSL to Jaipur Enclave on 13 April, Reliance said the transaction was not a related-party transaction, because the buyer was not part of the company’s promoter group. However, aside from being a former associate company, Japiur Enclave and its four shareholder entities have common directors with some of these entities sharing offices at the same address.