Reliance Industries Ltd’s recent sale of a second-level step-down subsidiary to a little-known company may test the limits of regulation on related-party transactions even while technically keeping to the rules, said legal and governance experts.
On 13 April, Reliance Retail Ltd sold its subsidiary, Reliance Projects & Property Management Services Ltd (RPPMSL), to Jaipur Enclave Pvt. Ltd for ₹ ₹274 crore, according to a stock exchange filing.
The sale consideration is 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 the company’s 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.
Privately held Reliance Retail is owned by Reliance Retail Ventures Ltd, which, in turn, is owned by Reliance Industries, the country’s largest and most valuable firm, with a market cap of ₹18.8 trillion.
This was not a related-party transaction, according to Reliance’s disclosures, because the buyer was not part of the company's promoter group.
However, Reliance’s stock exchange disclosure did not mention the rationale for the sale of a profitable unit to a company with zero revenues in FY25. Secondly, the prior association of the buyer company with Reliance, shared corporate infrastructure, and the presence of some Reliance employees on Jaipur Enclave’s board test the related party transactions (RPT) rules of the Securities and Exchange Board of India, said experts.
Reliance Industries did not respond to queries on whether the transaction was evaluated by independent experts.
Interconnected at different levels
Until March 2023, Reliance Industries, through its wholly owned subsidiary Reliance Eminent Trading & Commercial Pvt Ltd, owned 20% in Jaipur Enclave, the buyer, according to its shareholding pattern filed with the ministry of corporate affairs.
Three other privately held firms, Ashwani Commercials Pvt. Ltd, Carin Commercial Pvt. Ltd, and Centura Agro Pvt. Ltd, owned 30%, 30%, and 20% of Jaipur Enclave, respectively, until 2023.
Reliance Industries, through another wholly owned subsidiary, Reliance Ambit Trade Pvt. Ltd, owned 20% stake each in Ashwani, Carin, and Centura until three years ago.
Hence, all the companies—Jaipur Enclave, Ashwani, Carin, and Centura—were Reliance's associate firms. An associate firm is defined as one in which a company controls, directly or through subsidiaries, a stake between 20% and 50%.
Beginning April 2024, Reliance reduced its stake in all four companies and these ceased to be associate firms.
At the end of March 2025, Reliance Eminent Trading held 4.76% in Jaipur Enclave with Ashwani, Carin, and Centura owning 35.72%, 35.71%, and 23.81%, respectively. Mint couldn’t ascertain if there were any further changes in shareholding in the 14 months since.
Changes at one level above, too
A similar change in the shareholding pattern of the other three shareholders of Jaipur Enclave was observed during this time.
The other Reliance subsidiary, Reliance Ambit Trade, held 20% in Ashwani, Carin, and Centura at the end of March 2023.
Reliance Ambit Trade cut its ownership in Ashwani, Carin and Centura to 4.76% each at the end of March 2025.
The detailed shareholdings of Ashwani, Carin, and Centura are reflected in the graphic alongside.
All three private companies—Ashwani, Carin, and Centura—also hold shares in each other, along with another entity, Einsten Commercials Pvt. Ltd.
Reliance Ambit Trade also held a 20% stake in Einsten until March 2023, mirroring its shareholding in the other companies and now holds a 4.76% stake.
And as it did in three other companies, Reliance Ambit Trade now owns 4.76% in Einsten.
Same address, similar directors
Reliance Retail and Jaipur Enclave share a registered office on the third floor of the Court House building in Fort, Mumbai. Carin, Ashwani, Einsten, and Reliance Ambit Trade are located on its fourth floor with Reliance Eminent Trading on the fifth. Centura occupies the 14th floor of a separate building in Mumbai.
Mint visited the Court House building, where security personnel said the building was the registered office address for several Reliance Group companies with skeletal staff.
Jaipur Enclave, Carin, Centura, and Einsten had nil or less than ₹1 crore in revenues and less than ₹10 lakh in losses in FY25, as per their financial statements. Ashwani had income of ₹2 crore that year and a profit of just under ₹4 crore, driven by income tax gains.
Jaipur Enclave has two directors: Praveen Baser and Riya Lakhotia. Baser is the chief financial officer of Reliance Industrial Infrastructure Ltd, a listed company with a market capitalisation of about ₹1,200 crore in which Reliance Industries holds a 45.43% stake.
Lakhotia is a qualified company secretary who works as a manager at Reliance Retail, according to her LinkedIn profile.
A third director, Satyanarayanamurthy Veera Venkata Korlepara, a Reliance Industries management consultant, sits on the boards of three shareholder companies of Jaipur Enclave—Ashwani, Carin and Centura.
Emails seeking comments from Baser and Lakhotia regarding their employment with the Reliance Group and Jaipur Enclave went unanswered. Korlepara did not respond to an email on his association with three promoter firms of Jaipur Enclave and his stint as a management consultant with Reliance Industries.
Letter vs. spirit of the rules
“The RIL-Jaipur Enclave transaction highlights the ongoing tension between the letter and the spirit of Sebi’s RPT norms,” said Ankita Singh, managing partner at law firm Sarvaank Associates.
The presence of Reliance employees as directors and a shared corporate infrastructure creates a high risk of it being labelled a 'deemed related party’, she said.
“When an entity shares the same registered office and is governed by employees of the listed group, the burden of proof shifts to the company to prove that the entity is not part of the Promoter Group,” Singh said. “In the current regulatory climate, technical non-relationship is becoming a fragile defence against the broader 'promoter group' definitions that aim to catch exactly these kinds of circular, cross-held structures.”
Lastly, the presence of the CFO of a listed subsidiary of Reliance on the buyer’s board is a regulatory red flag that “effectively collapses” the non-related party defence, Singh said.
Amarjit Chopra, a former president of the Institute of Chartered Accountants of India held a similar view. “Technically, this may not be a related-party transaction. However, looking at the public disclosures and facts, this transaction is against the spirit of the law of RPTs,” said Chopra.
A sale of ₹274 crore is arguably a rounding error compared to Reliance Industries Ltd’s annual revenue of ₹10.7 trillion. Sebi’s listing obligation and disclosure rules require listed companies to seek shareholder approval only for RPTs that exceed ₹1,000 crore, or 10% of their annual consolidated turnover, whichever is lower.
“The transaction was not scrutinised because it is a relatively small transaction and non-material relative to the size of Reliance Industries,” said Shriram Subramanian, managing director of proxy advisory firm InGovern. “However, the company could have been more forthcoming in explaining the logic behind the sale."
