Reliance Retail has hit market cap of ₹11 Lac crores. Total valuation of Reliance Industries is ₹13,61,495 cr which is 80% of total business.
The valuation seems stretched considering Reliance Industries will split the shares in 3 business -
Reliance Oil & Gas
Although Reliance Retail as a standalone business is still not overvalued. We are moving our rating to 3 - Neutral and would advice investors to not take new positions in Reliance Retail.
Instead, one should look at Bazar India which is again in Retail busines and undervalued counter as alternative. This company has similar business model of V-mart and right now is 1/4th size of V-Mart in terms of Revenue.
V-Mart total valuation is ₹5,600 cr whereas Bazar India total valuation is ₹105 cr making it highly attractive investment.