Reliance Infrastructure Launches Real Estate Subsidiary with Rs 1 Lakh Capital

On August 12, Reliance Infrastructure Limited made a notable move by announcing the creation of a new subsidiary, Reliance Jai Properties Private Limited (RJPPL). This expansion marks the company's entry into the real estate sector, as detailed in their recent exchange filing.

On August 11, Reliance Infrastructure's share price fell by 1.80%, closing at Rs 225.85 on the BSE. The company’s market capitalization stands at Rs 8,946.62 crore, with its 52-week high recorded on April 4, 2024, at Rs 308.

RJPPL, established on August 12, 2024, operates as a wholly owned subsidiary of Reliance Energy Limited, which in turn is a subsidiary of Reliance Infrastructure. The new entity has an authorized and paid-up capital of Rs 1,00,000, divided into 10,000 equity shares valued at Rs 10 each.

Although it's a new addition, RJPPL is set to make a mark in the real estate sector, focusing on acquiring, selling, leasing, and developing properties.

Reliance’s Strategic Foray into Real Estate

Reliance Infrastructure Limited’s recent move to establish a new subsidiary, Reliance Jai Properties Private Limited (RJPPL), comes at a strategic moment when India's real estate sector is experiencing robust growth. This surge is fueled by urbanization, increasing income levels, and proactive government measures to enhance housing and commercial development.

By entering this booming sector, Reliance Infrastructure is positioning itself to leverage these opportunities and diversify its revenue sources. The Indian government’s ambitious Pradhan Mantri Awas Yojana (PMAY) aims to construct 20 million affordable homes by 2022. As of 2023, around 11.4 million houses have been sanctioned, with 9.71 million already completed or delivered.

Additionally, the government has earmarked Rs 48,000 crore (6.5 billion USD) for the development of 100 smart cities across the country. Up until 2023, over 7,900 projects worth Rs 1.93 lakh crore (26 billion USD) have been tendered, with more than 4,700 projects, valued at Rs 93,500 crore (12.6 billion USD), successfully completed.

 Infrastructure Investment Priorities: Roads, Railways, and Beyond

In the realm of infrastructure investment, Roads and Highways command the largest portion of funding, followed by Railways and Urban Public Transport. The Indian government has laid out ambitious targets for the transport sector. These include constructing a 200,000-kilometer national highway network by 2025 and increasing the number of airports to 220. Furthermore, the government aims to operationalize 23 waterways by 2030 and establish 35 Multi-Modal Logistics Parks (MMLPs).

The budget for infrastructure ministries has seen a substantial increase, rising from approximately Rs 3.7 lakh crore in FY23 to Rs 5 lakh crore in FY24. This significant boost creates ample investment opportunities for the private sector across various transport and logistics domains, according to Invest India.

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