A

Contemporary Issue Report

ON
RELIANCE INDUSTRY BASED STARTUP ADDVERB
BY
SHILIPI GAUTAM

ROLL NO:- 22/748

SUBMITTED TO :

RAJASTHAN TECHNICAL UNIVERSITY

In Partial fulfillment of the requirement for the award of Post Graduate
Degree of

MASTER OF BUSINESS ADMINISTRATION

Under The
Guidance of

Dr. ANKITA BIRLA

Dr. PRAVEEN SHARMA
Faculty of M.B.A. Program

University Department
Rajasthan Technical University
 CERTIFICATE

This is Certify that SHILIPI GAUTAM, a regular student of

the Management of Business Administration 1st
Semester(2022-24) in the University Department, SHILIPI
GAUTAM has completed her Seminar on Contemporary
Project Report on “A STUDY OF
RELIANVE INDUSTRY PURCHASE 54% STAKE IN
NODIA BASED STARTUP ADDVERB under my
supervision in the provided time period.

Supervised By : Dr. Ankita Birla & Dr. PRAVEEN

Sharma.
 STUDENT DECLARATION
I hereby declare that the project report entitled “A STUDY
OF
‘’RELIANCE INDUSTRY PURCHASES 54% STAKE IN NOIDA
BASED STARTUO ADDVERB’’ submitted by me to University
Department, in partial fulfillment of the requirement for
the award of the Degree of Master of Business
Administration is a record of bonafide project Work carried
out by me under the guidance of Dr. Ankita Birla I further
declare that the work reported in this project has not been
submitted and will not be submitted either in part or in full
for the award of any other degree or diploma in this
university or any other university.

Place: Kota Signature of the Student:

DATE (SHILIPI GAUTAM)
ACKNOWLEDGEMENT

It is with a sense of Gratitude; I acknowledge the efforts of

entire hosts of Well wishers who have in some way or other
contributed in their own special ways to the success and
completion of this Seminar on Contemporary Project Report on
“A STUDY OF Microsoft’s Proposed Acquisition of Microsoft’s
Proposed Acquisition of Activision Blizzard’’
” First of all, I would express my sage sense of gratitude to
Assistant Prof. Mr. Gitesh Vijay for his immense support and
faith. I also express my thankfulness to my project Guide Dr.
Ankita Birla for their kind advice, suggestions and constant help
in a lot of various ways during project. Further I would also like
to thank my all those seen and unseen hands who helped me a
lot in finalizing this project within the limited timeframe.
Introduction About Reliance Retail Investments in Addverb
Technologies

Reliance Retail Ventures, a unit of Reliance Industries, has acquired a 54% stake in
Addverb Technologies for a consideration of $132 million. In addition, RIL will
also acquire an additional 1.7% stake and take their total holding in Addverb
Technologies to 55.7% via a stock deal. This is one more in a series of digital and
green energy franchises that Reliance has been aggressively acquiring companies
over the last few months.

However, this is not the first round of funding that Addverb Technologies has got.
Earlier, it had raised $11 million from Jalaj Dani of Asian Paints. The current
transaction with Reliance Industries is worth Rs.990 crore and values Addverb
Technologies in the range of Rs.1,900 crore to Rs.2,000 crore overall. The
company has plans to gradually scale up its valuation closer to $1 billion over the
next few years and become a unicorn.

Addverb offers advanced robotic solutions and has been working closely with
premier companies like Asian Paints, Hindustan Unilever and Marico. Addverb
was the company that had help design and implement the warehousing solution for
JioMart which had eventually led to the stake purchase. The Addverb solution was
used by Reliance Retail for its fully automated warehouses for JioMart.

For Addverb, this deal gives them access to a much larger balance sheet. With this
partnership in place, Addverb Technologies will be able to effectively leverage the
5G battery technology, new energy initiatives, advances in material sciences and
others in the development of more advanced and more affordable robots. Addverb
is working towards substantial automation where robots almost take over most of
the routine operations.

Addverb will use the funds from Reliance Retail to set up a second manufacturing
facility in the Delhi-NCR region. It already has an existing facility at Noida for
manufacture of fully automatable robots. Addverb will also look to expand its skill
base quotient with these funds. It currently employs 550 engineers on its rolls and
will scale it up to 2,000 engineers on its rolls in the next few months. This is likely
to have a geometric output impact.
Addverb Technologies was founded in 2016 with the core start-up founders
holding 25% stake in the company even after the RIL dilution. Addverb currently
has operating subsidiaries located in the United States, Singapore, Australia and the
Netherlands.

Reliance Industries
Reliance Industries Limited is an Indian multinational conglomerate company,
headquartered in Mumbai. It has diverse businesses including energy,
petrochemicals, natural gas, retail, telecommunications, mass media, and textiles.
Reliance is one of the most profitable companies in India,[4] the largest publicly
traded company in India by market capitalisation,[5] and the largest company in
India as measured by revenue.[6] It is also one of the largest employers in India,
with over 300,000 employees in the world.[7][8][9][10]

The company is ranked 100th on the Fortune Global 500 list of the world's biggest
corporations as of 2022.[9] Reliance continues to be India's largest exporter,
accounting for 7% of India's total merchandise exports and it has access to
markets in over 100 countries.[11] Reliance is responsible for almost 5% of the
Government of India's total revenue from customs and excise duty. It is also the
highest income tax payer in the private sector in India.[11][12] The company has
relatively little free cash flow and high corporate debt.

History Reliance
1958–1980
Stamp released in 2002 to honor company founder Dhirubhai Ambani.

Reliance Commercial Corporation was set up in 1958 by Dhirubhai Ambani as a

small venture firm trading commodities, especially spices and polyester yarn. [1] In
1965, the partnership ended and Dhirubhai continued the polyester business of
the firm.[15] In 1966, Reliance Textile Industries Pvt. Ltd. was incorporated
in Maharashtra. It established a synthetic fabrics mill in the same year
at Naroda in Gujarat.[16] On 8 May 1973, it became Reliance Industries Limited. In
1975, the company expanded its business into textiles, with "Vimal" becoming its
major brand in later years.

1981–2000
In 1985, the name of the company was changed from Reliance Textiles Industries
Ltd. to Reliance Industries Ltd.[16] During 1985 to 1992, the company expanded its
installed capacity for producing polyester yarn by over 145,000 tonnes per
annum.[16]

The Hazira petrochemical plant was commissioned in 1991–92.[20]

In 1993, Reliance turned to the overseas capital markets for funds through
a global depository issue of Reliance Petroleum. In 1996, it became the first
private sector company in India to be rated by international credit rating
agencies. S&P rated Reliance "BB+, stable outlook, constrained by the sovereign
ceiling". Moody's rated "Baa3, Investment grade, constrained by the sovereign
ceiling".[21]

In 1995/96, the company entered the telecom industry through a joint venture
with NYNEX, USA, and promoted Reliance Telecom Private Limited in India. [20]

In 1998/99, RIL introduced packaged LPG in 15 kg cylinders under the brand

name Reliance Gas.[20]

The years 1998–2000 saw the construction of the integrated petrochemical

complex at Jamnagar in Gujarat,[20] the largest refinery in the world.

2001 onwards
In 2001, Reliance Industries Ltd. and Reliance Petroleum Ltd. became India's two
largest companies in terms of all major financial parameters.[22] In 2001–02,
Reliance Petroleum was merged with Reliance Industries. [17]

In 2002, Reliance announced India's biggest gas discovery (at the Krishna Godavari
basin) in nearly three decades and one of the largest gas discoveries in the world
during 2002. The in-place volume of natural gas was more than 7 trillion cubic
feet, equivalent to about 120 crore (1.2 billion) barrels of crude oil. This was the
first-ever discovery by an Indian private sector company. [17][23]

In 2002–03, RIL purchased a majority stake in Indian Petrochemicals Corporation

Ltd. (IPCL), India's second largest petrochemicals company, from the government
of India, RIL took over IPCL's Vadodara Plants and renamed it as Vadodara
Manufacturing Division (VMD). IPCL's Nagothane and Dahej
manufacturing complexes came under RIL when IPCL was merged with RIL in
2008.

In 2005 and 2006, the company reorganised its business by demerging its
investments in power generation and distribution, financial services and
telecommunication services into four separate entities.
In 2006, Reliance entered the organised retail market in India with the launch of
its retail store format under the brand name of 'Reliance Fresh'. By the end of
2008, Reliance Retail had close to 600 stores across 57 cities in India.

In November 2009, Reliance Industries issued 1:1 bonus shares to its

shareholders.

In 2010, Reliance entered the broadband services market with acquisition of

Infotel Broadband Services Limited, which was the only successful bidder for pan-
India fourth-generation (4G) spectrum auction held by the government of India. [33]
[34]

In the same year, Reliance and BP announced a partnership in the oil and gas
business. BP took a 30 per cent stake in 23 oil and gas production sharing
contracts that Reliance operates in India, including the KG-D6 block for $7.2
billion.[35] Reliance also formed a 50:50 joint venture with BP for sourcing and
marketing of gas in India.[36]

In 2017, RIL set up a joint venture with Russian Company Sibur for setting up
a Butyl rubber plant in Jamnagar, Gujarat, to be operational by 2018.

In August 2019, Reliance added Fynd primarily for its consumer businesses and
mobile phone services in the e-commerce space.

On the 18th of August 2021, Reliance Industries Limited (RIL) stated that it had
shut down its manufacturing units at Nagothane town in Maharashtra.

In December 2022, Reliance Industries Market cap stood at Rs.17,59,017.23 crore.

Shareholding
Chairman and MD: Mukesh Ambani

Director: Nita Ambani

The number of shares of RIL are approx. 644.51 crore (6.44 billion). The promoter
group, the Ambani family, holds 50.00% of the total shares whereas the
remaining 50.00% shares are held by public shareholders, including FII and
corporate bodies. Life Insurance Corporation of India is the largest non-promoter
investor in the company, with 7.98% shareholding.

In January 2012, the company announced a buyback program to buy a maximum

of 12 crore (120 million) shares for ₹10,400 crore (US$1.5 billion). By the end of
January 2013, the company had bought back 4.62 crore (46.2 million) shares
for ₹3,366 crore (US$420 million).
Listing
The company's equity shares are listed on the National Stock Exchange of
India Limited (NSE) and the BSE Limited. The Global Depository Receipts (GDRs)
issued by the company are listed on London Stock Exchange.It has issued approx.
5.6 crore (56 million) GDRs wherein each GDR is equivalent to two equity shares
of the company. Approximately 3.46% of its total shares are listed on Luxembourg
Stock Exchange.[

Its debt securities are listed at the Wholesale Debt Market (WDM) Segment of the
National Stock Exchange of India Limited (NSE).

It has received domestic credit ratings of AAA from CRISIL (S&P subsidiary) and
Fitch. Moody's and S&P have provided investment grade ratings for international
debt of the company, as Baa2 positive outlook (local currency issuer rating) and
BBB+ outlook respectively. On 28 December 2017, RIL announced that it will be
acquiring the wireless assets of Anil Ambani-led Reliance Communications for
about ₹23,000 crores.

ADDVERB
Noida, Uttar Pradesh based Addverb is a global robotics company which is
redefining motion. Their products incorporate the latest technologies and vastly
improve the efficiency and accuracy of the intralogistics operations. They have
unlocked the true potential of automated systems through the synergy of their in-
house manufactured hardware and robust software enabling them to charge
ahead in the domain of robotics automation. They are a group of passionate
individuals who have come together to foster innovation and provide leading
solutions in future warehouse and supply chain. Their In-house state of the art
manufacturing capabilities gives them the flexibility to provide innovative
solutions with plug and play approach from their wide-range product portfolio.
They operate across four verticals in the Intra-logistic operations sector such as
Robotics, AS/RS, Picking and Software. Addverb takes a unique 4D approach
comprising Discover, Design, Deliver & Dedicated Support for the digital
transformation of material handling processes, aimed at augmenting safety,
scalability, and flexibility.

Legal Name :
Addverb Technologies Private Limited Headquarters : Noida, Uttar Pradesh,

India Business Model : B2B

Founding Date : 2016

No. of Employees : 251 to 500 Core

Team :
1. Satish Shukla Co-Founder & Technology Evangelist

2. Amit Kumar Co-Founder

3. Sangeet Kumar Co-Founder & CEO

4. Bir Singh Co-Founder

5. Prateek Jain Co-Founder & COO

What does Addverb Technologies do?

The Noida based startup is an intra-logistics automation solution provider. It

builds robotics and automation solutions for factories and warehouses. The idea
is to automate laborious tasks related to the storage and movement of goods in
controlled environments.

It leverages artificial intelligence, machine learning, automated storage and

retrieval system (ASRS), shuttles, IoT along with their in-house software solutions
to improve the performance and accuracy of warehouse and factory operations.
The company has a manufacturing facility in Noida with the capacity to make
50,000 different types of robots a year.

Addverb offers robots under concepts such as pick to light, pick by voice, pallet
shuttle and yard management.

Under pick to light, picking zone light beams when a product is ready to be
moved. Pick by voice feature allows a factory operator to use voice commands to
confirm what has been picked and dispatched. The feature is language-agnostic
and can understand up to 14 Indian languages, including Hindi and English,
assisting pickers of diverse demographics.

Pallet shuttle is a battery-operated system to move products between aisles,

while yard management involves identifying the location of a product in a yard.

Addverb’s Secret Sauce: Why Reliance Invested $132 Mn In

This Indian Robotics Startup
By Mukul Yudhveer Singh

Reliance has recently acquired a 54% stake in Indian robotics and automation
startup Addverb for a sum of $132 Mn

Addverb plans to use the amount to expand in international markets, and also in
setting up the world’s largest robot manufacturing facility
Addverb, within five years of its inception, has served clients including Flipkart,
Amazon, Pepsico, Coca-Cola, Patanjali, HUL and more

“It took 4-5 months between us and Reliance to finalise the acquisition deal. We
were in parallel talks with other potential investors as well. Reliance, however,
moved super quickly and provided us the funding. Right now all I can tell you is
that Reliance’s plan to automate is massive. I have no knowledge of another
company who has such big automation plans,” — Sangeet Kumar, CEO, Addverb,
said about the Reliance’s Addverb acquisition.

India is not known for its hardware and robot manufacturing prowess, but Delhi
NCR-based Addverb is trying to change that.

Founded in 2016 by Sangeet Kumar, Prateek Jain, Bir Singh, Satish Kumar Shukla
and Amit Kumar, Addverb was recently in news after Reliance acquired 54% stake
in the company for $132 Mn.

Addverb’s proprietary warehouse robotics and automation products are being

used by retail and ecommerce giants around the world. Over the years, it has
helped giants including Flipkart, Amazon, Coca-Cola, Patanjali, HUL, Asian
Paints, Pepsico, ITC and Marico in automating their warehouses.

The funding from Reliance will help Addverb fuel its global expansion. It already
has operations in China, Europe, Africa, Australia and the United States. It also
operates subsidiaries in Singapore, Australia, Netherlands and the US.

As a matter of fact, Reliance was also associated with Addverb as a client before
indulging in investment talks. Besides the fund infusion, the Mukesh Ambani-
owned corporate giant has also placed an order for automation robots worth
over $1 Bn from the startup.

“Reliance needed a partner for its automation needs, and we needed a partner
whose facilities we could use to experiment and scale our offerings. They have a
big presence in the 5G sector as well. Reliance is a company whose scale cannot
be matched by any other company in India. Reliance made the move and we also
moved forward,” explained Sangeet.
For the uninitiated, the oil-to-tech conglomerate is betting big on the retail
segment in both online and offline categories, for which it is leveraging a host of
warehouses and fulfilment centres. For Reliance Retail, automating these
warehouses is one of the top priorities of Reliance, the Addverb CEO told Inc42
.

The Addverb Origin

The Addverb journey began at Asian Paints, where the five cofounders
were working on automating warehouses. Since robotics manufacturing
was not India’s strength, Asian Paints had to import all the machinery,
equipment, robots and everything else needed for this task.

That’s when the opportunity dawned on the quintet. “Why does India not
have a manufacturer of robots? Why are there no automation equipment
suppliers for factories and warehouses in India? These questions kept me
awake for countless nights,” recalled Sangeet.

The five quit their jobs at Asian Paints and decided to launch Addverb from
a two-room setup in Delhi’s Tagore Garden neighbourhood. They put in all
their savings to launch the company.

Addverb went into a trial and error phase during the first year of operations.
The focus was more on finding the right fit of suppliers and enablers for the
startup.

Despite no external funding, the startup was able to generate revenue of

INR 1 Cr in its first year (FY 2016-17). But to scale up they would need
funds. “We all had worked very closely with Jalaj Dani, co-promoter, Asian
Paints. He had told us not to hesitate if we required anything around what
we were trying to accomplish,” said Sangeet.

Dani agreed to invest $1 Mn in a pre-seed round, which was utilised for

procurements, R&D, and fulfilling existing orders. The startup also raised
INR 70 Lakh from GAIL India in its first year. It is interesting to note here
Sangeet Kumar has worked at GAIL India and Asian Paints before
Addverb, so he drew in the business leaders that he had already known to
kickstart Addverb.
The founders took up charge of various parts of the operations. Sangeet
Kumar became the CEO, Prateek Jain became the COO, Satish Kumar
Shukla took on the role of head of marketing and HR, while Bir Singh and
Amit Kumar were in charge of other aspects such as technology.

The biggest challenge in that first year included being able to set up
components manufacturing in the country, and at the same time carrying
out R&D or product development and cycle.

Addverb hired from the top engineering colleges of India and others
who had connections with suppliers for raw material and machinery. Sangeet told
us that all employees were given a free-hand, and allowed to try and fail. “We took
help from a lot of our suppliers. It was their knowledge power that helped us
become what we are today. Making 500 robots in a year is different from making
10000 robots in a year. Leveraging the experience of our suppliers has worked in
our favour beautifully.”

It also entered into knowledge-sharing collaborations with engineering colleges in

India and abroad. Addverb has worked and collaborated with IIT Delhi, Columbia
University in the US and other IIITs. The startup gave engineering students access
to modern equipment and got access to their thesis and research knowledge around
emerging topics.

Manufacturing 50,000 Robots A Year

India is not known as a hardware nation. It is generally seen as a market focused on
software development and IT services. When it comes to robotics and automation,
the country stands far behind market leaders.

The industrial automation market size was $191.89 Bn in 2021. The market size is
expected to rise from $205.86 Bn in 2022 to $395.09 Bn by 2029. A report by
International Federation of Robotic points out that as opposed to over 1.68 Lakh
industrial robots shipped in China during the year 2021, there were only 3,200
industrial robots shipped in India.
 But Addverb is looking to change that while also posting healthy
revenue and maintaining profits. Reliance’s investment in Addverb and the
$1 Bn order have served to put the startup in the limelight, and barring the
Covid-19 lockdown year, the company has been profitable since its
inception.

It posted revenues of INR 1 Cr during FY 2016-17, which grew to INR 10

Cr, INR 65 Cr and INR 200 Cr between 2017 and 2020. In FY22, the
startup is aiming to achieve INR 400 Cr in revenue and INR 1000 Cr in
revenue by FY23.

What’s interesting is that the startup’s majority revenue, 80 per cent, has
been coming from India. The company does have customers in Singapore,
Australia, Philippines, Brazil, the US, Netherlands, the UK among others.

The company is also planning to hire 450 professionals by the end of the
next fiscal year. It currently employs 550 individuals. “We would also be
investing in setting up the world’s largest robot manufacturing facility here
in Noida. The land has been applied for, equipment ordered, the
construction will begin anytime soon,” the CEO told us.

With its two robot manufacturing factories, the startup will be able to
manufacture 50,000 robots, claimed Sangeet Kumar. Besides this, Addverb
is trying to increase its international revenue from 20% to 30%.

Addverb, after its acquisition by Reliance, it is also focusing on developing

robots and collaborative robots or ‘cobots’ for the upcoming 5G era, and
Reliance’s presence in the 5G testing, spectrum and equipment arenas
might prove to be beneficial for the company. The biggest challenge that
the startup is working on right now is setting up a component
manufacturing ecosystem in India. It is collaborating further with industry
and academia to enable the same.

Reliance-backed Addverb’s scale touches Rs 317 Cr in FY22,

remains profitable
When it comes to robotics and large scale automation solutions,
Greyorange is the name that comes to mind as the poster boy of the sector
in the past seven to eight years. While the sector didn’t see any other
company close to GreyOrange’s scale and impact, Noida-based Addverb
Technologies appears to be growing at a quick clip in the past few years.

Addverb’s revenue from operations grew 64.2% to Rs 317 crore in FY22

from Rs 193 crore in the previous fiscal year (FY21), according to its
annual financial statement with the Registrar of Companies (RoC).

Reliance Retail had acquired a majority stake (54%) in Addverb for $132
million in January this year. The investment by the Mukesh Ambani-led
group was seen as a strategic one, but the company’s strong growth
momentum in FY22 could be one of the driving factors for the
deal. Previously, Addverb raised $11 million in Series A and pre-Series A
funding rounds from Jalaj Dani (co-promoter of Asian Paints).

Addverb designs and builds robotics and warehouse automation solutions

for clients and the sale of such products constitutes 90% of its operating
revenue. This income surged 63.5% to Rs 282 crore in FY22 from Rs 172.5
crore in FY21. The company also generates revenue from installation and
commission on sales which grew 91% to Rs 32.48 crore in FY22.

In line with growth, total expenses at Addverb also shot up 64.5% to Rs

317.50 crore in FY22 from Rs 193 crore in FY21. The cost of materials
consumed was the largest cost center and formed 60% of the overall cost
which grew 42.4% to Rs 190 crore in FY22.

Employee benefit expenses were another major expense, spiking 2X to Rs

84.55 crore in FY22 from Rs 40.87 crore in FY21. Cost for the subscription
membership fee and travelling conveyance enlarged 4.3X and 2X to Rs
4.52 crore and Rs 8.25 crore respectively in the last fiscal year.
Addverb also spent another Rs 6.66 crore on legal and professional fees
while the cost of advertisement and promotion spiked 7.7X to Rs 4.93
crores in FY22.

Despite 64.5% growth in expenses, Addverb has managed to stay in the

black in FY22. Its profits grew 76% to Rs 2.43 crore during the last fiscal
year while the company’s cash outflow from operations grew 13X to Rs
56.41 crore in FY22.

With industrial automation and robotics gaining traction, and a

manufacturing renaissance of sorts underway in India, the firm has a strong
base to work on now.

OVERVIEW - ADDVERB TECHNOLOGIES PRIVATE

LIMITED
Addverb Technologies Private Limited is an unlisted private company
incorporated on 24 June, 2016. It is classified as a private limited company
and is located in Gautam Buddha Nagar, Uttar Pradesh. It's authorized
share capital is INR 1.45 cr and the total paid-up capital is INR 51.22 lac.
Addverb Technologies Private Limited's operating revenues range is INR
100 cr - 500 cr for the financial year ending on 31 March, 2022.
It's EBITDA has increased by 238.39 % over the previous year. At the
same time, it's book networth has increased by 91.28 %. Other
performance and liquidity ratios .