Mukesh Ambani, Isha Ambani’s BIG exit, Reliance Retail writes-off Rs 16450000000 stake in…, due to…

Mukesh Ambani, Isha Ambani are always planning something new for Reliance Retail, but this time they have written off their investment from Dunzo.

Reliance Industries Ltd. has written off its Rs 1,645-crore investment in quick-commerce firm Dunzo Digital Pvt. Ltd. It confirmed that Dunzo ceased to be a related party during the financial year.

The Mukesh Ambani-led conglomerate had valued its holding under compulsorily and optionally convertible preference shares at Rs 1,625 crore last year. Reliance Retail had originally acquired a 25.8% stake in Dunzo for about $200 million (Rs 1,488 crore) in 2023 to improve its grocery delivery operations. 

Why Reliance Retail Wrote Off Investment In Dunzo?

The write-off comes at a time when Reliance Retail is facing a slowdown. In Q1, Reliance Retail Ventures Ltd.’s net profit fell 7.7% quarter-on-quarter to Rs 3,271 crore. Its revenue also dropped 5% to Rs 84,172 crore. Earnings before interest, tax, depreciation, and amortisation (EBITDA) also went down 5% to Rs 6,381 crore.

Apart from this Dunzo’s decline was very clear earlier when it shut down operations in January. Its app and website also went offline. Not only this move but its last remaining co-founder and CEO, Kabeer Biswas also later joined Flipkart to lead its quick commerce arm, Flipkart Minutes.

When Reliance Invested In Dunzo?

Reliance entered the quick commerce space in January 2022 by participating with a $240 million funding round in Dunzo. It acquired a 26% stake and joined other prominent investors like Google, which held 19.3%. But when Dunzo’s financial troubles and operational setbacks started, Reliance shifted its focus on its retail store network.

Dunzo was founded in 2014 and started as a hyperlocal convenience platform before entering into grocery delivery and quick commerce. Over the years, it secured over $450 million in funding from marquee investors like Reliance, Google, and Lightbox. However, the startup struggled to survive in the competitive quick commerce market and was burdened by high cash burn and wafer-thin margins.