Reliance Capital Blog

Reliance Capital, India's Berkshire Hathaway

Friday, September 02, 2011

Rel Cap to hold 74% stake in Insurance Company Post Nippon deal

Post the deal Rel Cap will hold 74% stake in the company and 26% will be controlled by Nippon under strategic agreements, Ghosh confirmed.

Sunday, March 20, 2011

Nippon Life buy 26% in Reliance Insurance

Japan's largest life-insurer, Nippon Life is eyeing 26 per cent stake in Anil Ambani-owned Reliance Life Insurance Co for $724 million

Monday, January 03, 2011

Reliance Cap arm buys 26% stake in ICEX

The Anil Dhirubhai Ambani Group (ADAG) on Monday announced its entry into the commodities futures space by acquiring a 26% stake in Indian Commodity Exchange (ICEX) for about Rs 50 crore, sources said.

The deal values ICEX at about Rs 200 crore. As part of the deal, Reliance Exchangenext (RNext), a wholly-owned subsidiary of Reliance Capital, ADAG's flagship company in the financial services space, will buy the stake from Indiabulls Financial Services and step in as an anchor investor. The regulatory approvals are already in place, a release from Reliance Capital said.

Other than Indiabulls, MMTC, IDFC, KRIBHCO and Indian Potash have stakes in ICEX, which is a screen-based derivatives exchange for commodities , was launched in November 2009. Post this deal, Indiabulls will hold 14% stake in this commodities bourse.

The buying of stake in ICEX also marks the entry of RNext into the commodities derivatives space, one of the growing exchange spaces in the country. The ADAG group company already has set up a spot exchange for commodities trading through its wholly-owned subsidiary, Reliance Spot Exchange ( RSX). This is an electronic mandi that focuses on agri commodities.

Read more: Reliance Cap arm buys 26% stake in ICEX - The Times of India

Friday, September 24, 2010

Reliance Capital seeks partner for China entry

Reliance Capital, owner of India’s largest mutual fund manager, is seeking a Chinese partner to tap funds in the most-populous nation, said Vikrant Gugnani, chief executive of the firm’s international businesses. “We want to get China investors access to the India growth story,” Gugnani said. “We’ve had a fair amount of meetings in the past six months: now, we’re really focused,” he added. Reliance Capital, controlled by billionaire Anil Ambani, seeks to boost assets under management and private-wealth clients across Asia, Gugnani said.

Reliance Consumer Fin aims Rs 40K cr loan disbursals

Betting big on infrastructure sector, Anil Ambani Group firm Reliance Consumer Finance plans to bolster its business to increase loan disbursals by over four times to Rs 40,000 crore in next 3-4 years.

Reliance Consumer Finance, which is a part of Reliance Capital Group, is looking to tap vast financing opportunities available in the fast growing infrastructure sector in the country.

"We are planning to ramp up our loan order book about four times from the current Rs 9,500 crore to Rs 40,000 crore in the next three-four years," Reliance Consumer Finance CEO K V Srinivasan told PTI.

"Our key focus area for driving the growth will be infrastructure sector, as there is huge opportunity available in the sector to cater to financing requirements of primarily medium-sized companies and large firms as well," Srinivasan added.

Other key segments to which Reliance Consumer Finance offers its services are small & medium enterprises financing, Commercial vehicles and equipment financing and mortgages.

Reliance Consumer Finance had a customer base of over 1,17,000 customers, as on June 30, 2010, across the top 16 Indian metros.

Last month, Finance Minister Pranab Mukherjee had said there may be 30 per cent gap in infrastructure funding requirement, targetted at Rs 41 lakh crore, in the 12th Five Year Plan (2012-2017).

He said the fundamental constraint in financing infrastructure relates to the limits on banks' lending to the sector due to asset-liability mismatch.

In the 11th Five year Plan ending March 2012, the government had announced infrastructure investment target of over Rs 20 lakh crore.

Monday, September 06, 2010

Reliance Capital To Invest In Action Construction Via Pref Issue

Action Construction Equipment Ltd is planning to make a preferential allotment to Reliance Capital that will see the financial services arm of Reliance ADA Group picking around 3.2% stake. Although the firm has not disclosed at what price it will issue the shares, at the last traded price, the company could raise around Rs 21 crore.

The firm that generated revenues of Rs 427 crore with net profit of Rs 17.9 crore for the year ended March’10 gets almost two thirds of its revenue from sale of cranes. The rest of the revenues come from material handling and other construction equipment besides tractors.

The firm that raised around Rs 60 crore through a public issue four years ago has used almost the entire sum for working capital management, new manufacturing plants and acquisitions. It has its production facilities in industrial township of Faridabad.

Early this year Mona Agarwal, part of the promoter group had subscribed to warrants at a price of Rs 41.45 a piece that will eventually lead to inflow of around Rs 21 crore at the time of conversion into equity. The promoter holding already stands at 66% and with the preferential allotment and warant conversion into equity, the promoter holding will remain at the same level. Reliance Capital's stake will accordingly shrink to 3% after the warrants are converted by the promoters.

Wednesday, June 30, 2010

Marks and Spencer to open 50 stores in India in 3 years

British high street retailer Marks and Spencer (M&S) is to more than double its retail presence in India, targeting 50 stores in the next three years.

M&S currently operates 17 stores in India through a joint venture with Reliance Retail. Last week it opened its latest store in Chennai.

A spokesperson for M&S told, the UK apparel and textile industry's online source, that the joint venture with Reliance Retail has allowed it to "gain better control" in India.

For M&S, market control means controlling the choice of location and space of its stores. In India, it is primarily looking at city malls: "In India there are lots of great opportunities but a lot of it is about relying on the space becoming available, so we do want to open stores but it's about making sure we get the right locations, and the right shopping malls."

The spokesperson said future stores in Indian cities would offer a wider range of the M&S range: "As well as trying to expand our presence, it's about getting the size of the store right. So where some of our franchise stores are a little bit small, the stores we are opening now, we're trying to build them a bit bigger so that we can offer a bigger catalogue."

M&S had formed the joint venture with Reliance Capital in 2008 assessing that local sourcing will help it lower prices for Indian consumers.

Reliance Capital to launch Shariah-compliant funds in Malaysia

Reliance Capital Asset Management's Malaysian arm today announced the launch of its first Shariah-compliant products, including an India Fund, from next week.

Being schemes adhering to Shariah laws, the money generated will not be invested in any instruments that carry interest rates.

The asset management company will launch two Islamic funds, Global Equity Fund and India Country fund, Reliance Asset Management Malaysia (RAMMY) said in a statement.

"We will launch the India Country fund next week and the Global Equity Fund by the end of July," Reliance Capital CEO Vikrant Gugnani told PTI.

According to Shariah or Islamic law, the receipt or payment of interest is barred, in addition to speculative activities such as gambling, among others.

He said the funds would basically target institutional investors and the AMC would also come up with products for retail investors.

"Targeting the institutional investors is the first step we have taken. We will come up with products for retail customers in next two years," he added.

RAMMY will be the flagship venture in the Islamic asset management business of Reliance Capital.

RCAM is the largest fund house in India with average assets under management of Rs 1.19 lakh crore. RCAM has over 72 lakh investors. The 37 fund houses in India currently manage assets worth Rs 8.03 lakh crore.

Both the funds will be managed from Malaysia by RAMMY. However, for the India Fund, the AMC will appoint a local company as investment advisor, the statement said.

"Islamic finance is a serious niche business for Reliance... Over time, we aim to create a sizable business and help establish Malaysia as the global hub for Islamic asset management," RAMMY CEO Ian Lancaster said.

The company will seek asset management opportunities in government-linked companies (GICs) and the private sector, the statement added.

Tuesday, June 22, 2010

Reliance Cap Buys 18% In Bloomberg-UTV

Anil Ambani-owned Reliance Capital Ltd (RCL) has acquired 18% stake in Bloomberg-UTV business news channel for an undisclosed amount. Shares of Reliance Capital went up Rs 4.10 or 0.54% to trade at Rs 761.65 on the Bombay Stock Exchange today.

Bloomberg UTV is a strategic partnership between Bloomberg LP, a global leader in business information, and the founder of UTV, Ronnie Screwvala. Post restructuring, Bloomberg will own 15% of Bloomberg UTV and the balance 67% is controlled by the UTV founders.

UTVi was rebranded as Bloomberg UTV after Bloomberg picked up a 15% stake in October 2009. It signed a content and co-branding agreement with Bloomberg after the deal. UTVi was broadcast by UTV News Ltd, a company wholly owned by Ronnie Screwvala, also chairman and promoter of UTV Software Communications Ltd.

The investment will form part of Reliance Capital's exposure to the media sector including its existing investments in the Network 18 group (which operates CNBC-TV18, CNN-IBN, IBN 7, Colors and Awaaz channels), and TV Today network (which operates the Aaj Tak and Headlines Today news channels).

According to a report jointly published by the Federation of Indian Chambers of Commerce and Industry (FICCI) and KPMG, the media and entertainment industry in India is likely to grow 12.5% per annum over the next five years and touch $ 20.09 billion by 2013.

Anand Shah, media analyst with Angel Broking, is of the view that more consoildation is bound to happen in the Indian media industry in near future. "Currently, there are lots of loss-making media groups in the country, for whom the survival will be difficult. However, in electronic media, only those with more channels and strong networks can survive in the present condition. As of now, there is lesser room for too many media players."

Once the FDI cap is removed, the consolidation will not happen as much because more money will be pumped into the industry, he added. According to VCCEdge, since 2005, 38 M&A deals worth $730 million were struck in the broadcasting space. In media, 156 M&A deals worth $1.6 billion took place since 2003.

The major deals in broadcasting space in 2010 include Zee Entertainment Enterprises' acquisition of 9X channel from INX Media Pvt. Ltd. for a price of approximately $14.4 million (Rs 640 million). In another deal, Zee Entertainment Enterprises acquired 50% stake in Dubai-based Taj Television Ltd. for a price of $44.14 million (Rs 2 billion) from Bukhatir Investments Ltd. The company had acquired 50% stake in Taj Television for $57.15 million in late 2006. Taj Television Ltd. owns and operates Ten Sports channel.

In 2009, Turner Asia Pacific Ventures Inc., a wholly owned subsidiary of Time Warner Inc. acquired 85.68% stake in NDTV Imagine Ltd. for a price of $126.5 million (INR 5.91 billion) from NDTV Networks plc. NDTV Imagine Ltd. is a Hindi general entertainment channel established by NDTV Group.

Two months back, NDTV had terminated its agreement with Scripps Networks Interactive Inc. for the sale of a 69% stake in its subsidiary NDTV Lifestyle (which operates NDTV Goodtimes) for $55 million. The transaction was expected to be completed by the end of the first quarter of 2010.

Everest Kanto Raises Rs 81Cr Via Pref Issue To Reliance Capital

Gas cylinder maker Everest Kanto Cylinder Ltd is raising around Rs 81 crore ($17 million) through a preferential allotment of shares to two separate mutual fund schemes of Reliance Capital.

Reliance Growth Fund will pick around 4 million shares while Reliance Regular Savings Fund - Equity Option will subscribe to around 2 million shares. The two funds will together pick around 5.6% of the expanded capital base of the firm. The shares will be issued at Rs 135 a piece around 4% premium to the market price of Rs 131.

The proceeds of the proposed preferential offer will be utilised for capital expenditure, working capital and repayment of debt.

The company that reported around 69% drop in consolidated net profit for the year ended March’10 over the year ago period is looking to commission two new plants in Gujarat this year. It has spent Rs 185 crore in the two plants and is expected to spend another Rs 30 crore in one of the units.

The firm counts among its investors Beacon India and New Vernon who held around 1.5% each as of March 31. Promoters own close to 59% of the firm.