Reliance Capital Blog

Reliance Capital, India's Berkshire Hathaway

Tuesday, August 29, 2006

R Trade ties up with UTI Bank

R Trade, the financial services brand promoted by the Anil Ambani group, has tied up with UTI Bank which will serve as its main banker.

Transactions done through R Trade Securities and R Trade Commodities, respectively the stock and commodity broking outfits set up by the group, will be supported by the bank.

Besides UTI Bank, arrangements have also been made with three others - ICICI Bank, HDFC Bank and IDBI Bank. These, feel sources close to the development, should enable R Trade to cater to a wide range of clients.

"While UTI Bank and the others will be our preferred bankers, the former is expected to play a key role in the expansion of our operations," a senior source mentioned while referring to R Trade's plans to expand geographically across customer segments.

Online services, incidentally, will be the group's special focus. Besides the two broking firms, the group has also set up a separate firm named R Trade Financial Services; the latter has recently received RBI's consent for commencing business.

Given R Trade's plans, a strong banking tie-up will be extremely significant, it is pointed out. Online brokers such as ICICIdirect and Kotakstreet (now kotaksecurities.com) are said to have an advantage in the shape of their close connections with the parent banks. This would not quite be the case with R Trade, it is felt.

R Trade, sources indicated, proposed to partly outsource news content from Dow Jones, the global information major. Clients will be able to access DJ news - which is otherwise a subscription-based service - that will be made available on the site.

Saturday, August 19, 2006

Yatra (www.yatra.com), a venture backed by Reliance Capital, Norwest Venture Partners (NVP) and media company TV18, has launched its services

The assisted, online and call-center-based travel services company will offer travel-related information, pricing, availability and reservations for airlines, hotels, railway, buses and car rentals across 5000 large cities and small rural areas throughout India.

“Yatra is at the forefront of the changing face of travel in India, as online travel booking will soon become the norm,” said Promod Haque, managing partner at Norwest Venture Partners (NVP) and Yatra board member. “Yatra is dedicated to serving the unique needs of the Indian traveler, and is poised to become the preeminent travel services company in India. I encourage travelers to visit Yatra to take advantage of first priority booking, customised travel packages and vast choices that haven’t been available until now.”

The features include extensive domestic hotel options catering to the needs of the growing middle class travellers in India through its relationships with over 1,000 domestic hotels in more than 150 cities and towns across India with a special focus on budget travelers, by also offering a significant number of hotels in the “under Rs 1,000 per room night” (US$22.5) category.

The company says it is offering selection of flights across all major domestic airlines as well as low cost carriers and last minute booking ( the only online travel company to offer travelers the convenience of booking flights up to three hours before their departure).

Other highlights include dynamic packaging, holiday travel packages offering specially negotiated holiday packages, being the only company in India to offer a flexible search option for airlines, allowing travelers to search for the best deal within two days of their selected travel date, it stated.

Reliance ARC to acquire NPA worth Rs 40K cr

The Rs 100-crore Reliance Asset Reconstruction Company (RARC), set up by ADAG owned the Reliance Capital, is planning to acquire Rs 30-40,000 crore of stressed assets in 2-3 years. Reliance Cap will control 49% in the Asset Reconstruction Company.

The company which has already three PSU partners — General Insurance Corporation, Corporation Bank, Indian Bank who will each holding 15 % — is looking for a fourth on from private sector for a 6% stake. The new ARC is also open to the idea of having a foreign partner. The company after putting all its shareholders in place will apply for licence.

The wagonwheel: Anil Ambani is closing in on logistics firm


Anil Ambani’s Reliance ADA Group, through its private equity arm, is in talks to acquire a significant stake in Patel Roadways.

If the discussions reach their logical end, it will be Reliance-ADAG’s second major investment in pure-play logistics.

Group firm Reliance Capital had acquired 44% stake in the Bangalore-based courier and express company, DTDC.

O P Harshwal, CEO of Patel Roadways, declined to comment saying he’s not aware of such a move , adding, “only the promoters could throw light on such matters”.
Arif Patel, vice-chairman of Patel Roadways, could not be contacted as he was travelling.

Sources said the senior management of Patel Roadways and Reliance-ADAG officials have been holding talks in the recent past. Reliance-ADAG may be aiming to penetrate the nascent retail sector by readying supply chain efficiencies at a time when global majors are bracing for an entry.

The group is also currently weighing a role in the country’s pharmaceuticals supply chain.

Patel Roadways recently un-wrapped a major restructuring exercise which enables it to morph into a full fledged one-stop shop for logistics.

A large part of the revenues of Patel Roadways accrue from plying trucks on highways. But the company has of late been expanding its business profile by foraying into full-fledged logistics services that include supply chain management solutions or third-party services.

Towards this strategy, Patel Roadways recently amalgamated its group company, Patel On Board Couriers, with itself.

Patel Roadways recorded net freight earnings of Rs 120.89 crore in the last fiscal, while Patel On Board had registered an income of Rs 134.39 crore during the same year.

The company focusses on routes that are less than 1,000 km and between 100-500 km. Founded in 1959, as a one truck activity Patel Roadways has since grown rapidly into one of the largest surface logistics and road transportation companies in Asia. It has a network that spans 1,000 stations countrywide and a workforce of over 1,000 highly trained people.

At the time of the DTDC takeover, Reliance Capital said that the industry is poised for mega growth and third-party logistics is becoming important as India’s retail sector gets more and more organised.” DTDC already has a network of 3,700 franchisees.

Reliance mutual removes limits on equity funds

Reliance Capital Asset Management Ltd. has removed all ceilings on subscriptions to its Reliance Equity and Reliance Growth funds with immediate effect, a senior official said on Friday.

Reliance Equity had shut doors to subscriptions above 500,000 rupees on April 15, soon after its launch which resulted in a large collection.

"Having fully constructed the portfolio (of Reliance Equity), now we have the ability to take additional money," President Vikrant Gugnani told Reuters.

The fund is the country's largest equity scheme managing assets of 53 billion rupees at July end.

Separately, the 10-million-rupee limit for investment on Reliance Growth fund was also withdrawn. This fund had a corpus of 19.63 billion rupees.

The fund house managed about 262 billion rupees in assets at the end of July, data from the Association of Mutual Funds in India showed.

Reliance Capital thinks mega for insurance venture

The Anil D Ambani-controlled Reliance Capital on Thursday announced its business strategy for life insurance venture following the acquisition and relaunch of AMP Sanmar as Reliance Life Insurance, reports Economic Times.

The strategy involves ramping up its customer base within the shortest possible time by selling highly standardised policies to customers including 2.5 million Reliance mobile subscribers.

To achieve this objective the company has launched Connect2Life, a 15 year conventional insurance plan with savings. The policy can be bought for a sum assured of Rs 1 and Rs 2 lakh without any medical tests on submission of a proposal that requires answers to only seven questions.

“We are not targeting any specific number in business. What we are targeting is a leadership ranking and our shareholders have committed to meet whatever resources are required to get there” said P Nandagopal, chief executive officer.

The target is highly ambitious considering that AMP Sanmar, when it was acquired by Reliance, was at the bottom of the ranking list. Since then the company has moved up a few notches to number eight position following a 627% growth in sales to Rs 132 crore in the first quarter.

Reliance has of late gone on a recruitment overdrive and has drafted over 30,000 agents with another 10,000 in the pipeline. The company is also is advanced talks with banks for a distribution partnership, officials said. To meet the infrastructure cost, Reliance Capital has already pumped in Rs 166 crore taking the company’s paid up capital to Rs 383 crore.

Although Reliance had acquired AMP Sanmar a year ago the group had been quiet on its business as it has been on a recruitment overdrive.

The business has also got a complete overhaul with a brand new management structure in place. The headquarters of the company, which was formerly in Chennai will now be relocated to Navi Mumbai near Dhirubhai Ambani Knowledge City.