Good morning [%first_name |Dear Reader%],

In the second-ever edition of this newsletter, back in October 2021, I’d written about how Reliance Retail loves to buy middling companies.

The retail and commerce arm of Mukesh Ambani‘s Reliance Industries had made a string of acquisitions over the previous two years—Netmeds, Grab, Hamleys, Justdial—and looked set to extend its shopping spree.

And by the time The Ken’s next piece on the company came around, in March 2022, it had acquired another one. Here’s what we wrote back then in our detailed analysis of its soaring valuation on the unlisted market:

So, is this how Reliance plans to stay on top of India’s retail market? By hoovering up everything in sight? It’s very easy to believe. Reliance has made 25 deals in retail and e-commerce over the past three years, after all.

But a quick look at the company’s capital expenditure (capex) shows that acquisitions are nothing more than a sideshow in the overall scheme of things.

Reliance Retail’s US$5B capex is proof it’s more ‘build’ than ‘buy’

Here’s a number for you to digest slowly: Reliance Retail’s capex in the two years since the pandemic has been Rs 40,000 crore (US$5 billion). Three-quarters of that were spent just in the year ended March 2022.

Maybe you think that number is so high because of all those acquisitions Reliance had made in that period. That was my conclusion too, at first glance.

But it couldn’t be further from the truth.

Let’s take the major deals Reliance Retail has made in the last two years. The largest was the acquisition of a two-thirds stake in search-and-listings company Just Dial. Reliance Retail paid over Rs 5,700 crore (US$714 million) for the company.

Then there was the Rs 1,490 crore (US$187 million) investment in hyperlocal-delivery startup Dunzo in January 2022; a Rs 980 crore (US$123 million) investment in robotics firm Addverb Technologies during the same month; and a Rs 950 crore (US$119 million) acquisition of lingerie brand Clovia in March.