Reliance Capital Blog

Reliance Capital, India's Berkshire Hathaway

Wednesday, October 11, 2006

Anil Ambani to re-enter R&T business

More than a decade after Reliance Industries vacated the share registry and transfer business, Reliance ADAG is set to re-enter the sector under the aegis of its flagship company- Reliance Capital.

The new foray could be seen as a bid to capture all streams of revenues flowing from the broking business.

Even as R Trade, Anil-Ambani-controlled Reliance Capital’s mega-foray into stock broking is slated for a launch, industry circles reveal that the group is preparing for an entry into the share registry and transfer (R&T) agents business.

It has been reliably learnt that Reliance Capital has hired consultants Ma Foi and Team Lease, among others, to help recruit staff for its R&T business.

“We do not comment on speculation,” is all that was gleaned from a Reliance Capital spokesperson.

Since Reliance Consultancy Services (the R&T arm of the erstwhile Reliance group) wound up operations, Karvy has been acting as R&T agents to all the Reliance companies, including those that come under the Reliance ADAG banner.

The incumbents, Karvy, Intime Spectrum (the latter recently took over the R&T business of MCS, though only around 150 of MCS’ 350 clients have moved to Intime till date) and others, may have to watch out, but it is still unclear as to whether Reliance Capital’s foray into this business would only be to act as registrar for its own asset management arm, Reliance Mutual’s schemes, or would entail a concerted effort to become a full-fledged corporate registry that will include its group companies.

If it’s the latter, it may spell trouble for Karvy since it is the R&T agent for all the listed companies of the Reliance ADAG group. These include Reliance Capital itself, Reliance Communications, Reliance Energy and Reliance Natural Resources. The Reliance ADAG companies boast of a shareholder base of over 20 million shareholders.

The new development comes at a time when the R&T industry is consolidating. Last year, the Tatas decided to move away from R&T business by selling a part of its stake to Darashaw & Company.

“It will be good for the industry if the new entrant, whoever it might be, sets new benchmarks and improves service standards. But since it is a service-oriented industry, existing players are not performing badly, and will give the new player a run for its money,” said Ramnarayan MV, director of Intime Spectrum.

Reliance Capital is registered as a depository participant with National Securities Depository Ltd (NSDL) and Central Depository Services Ltd (CDSL). It has also sponsored Reliance Mutual Fund, and operates in the insurance space through Reliance General Insurance Company and Reliance Life Insurance Company.

Sunday, October 08, 2006

Reliance Capital have bid for over Rs 100 crore in DCB IPO

British banking major Barclays Group seems to be on an investment overdrive. It is learnt to have bid tad less than 5% equity in the recently concluded Development Credit Bank’s, DCB initial public offering, IPO. Other institutions, which have put in significant bids, are Canara Bank, IDFC and Reliance Capital, reports The Economic Times.

The price band for the DCB IPO, which ended on October 6, was fixed at between Rs 22-26. The bank is making a fresh issue of 7.15 crore shares, which would help it raise Rs 157-185 crore (Rs 1.57-1.85 billion).

Canara Bank is said to be the biggest bidder in the IPO and has put in a bid of over Rs 100 crore (Rs 1 billion). IDFC and Reliance Capital have also bid for over Rs 100 crore. FIIs, which have also put in significant bids, include Sovereign Global and Sandstone Capital. Public sector banks have in the past couple of years put in major bids in bank issues. However, they normally exit post-listing. Sources said Barclays has put in a bid for 4.9% of the enlarged share capital of the bank. The group has bid through Barclays Capital Mauritius.

Though the investment size would be much smaller than other major bidders, this could be possibly for the first time that a foreign bank is looking at investment through an IPO. This would be the second investment by the group in a private sector bank. It had last year picked up a stake in UTI Bank and currently has a shareholding of 4.95%. This is likely to be a portfolio investment for the UK group.

The group has been slowly increasing its presence in India. Barclays had last month invested USD 380 million in AAA Global Ventures, and acquired a non-banking finance company Rank Investments and Credits for USD 7.5 million. The group would infuse fresh capital to increase its total investments in the NBFC to USD 50 million. It is currently awaiting regulatory approval.

It has recently started the global retail and commercial banking division in India. This is the division’s maiden launch in Asia. The new vertical will do high-end corporate banking, SME, trade finance, cash management, supply chain management asset-based finance like leasing and will also get into retail in due course. The group is looking at investing USD 70 million in ’06 and ’07 for its corporate banking venture in the country.

The DCB IPO has seen an over-subscription of 36 times. Qualified institutional buyers, QIBs, which were eligible for 50% of the IPO, have put in bids of 37.9 times, institutional investors including HNIs which were eligible for 15% have put in bids of 84 times and the retail portion saw an oversubscription of 15 times.

After the issue, Aga Khan Fund for Economic Development’s, AKFED stake in the bank will come down to 30.13% from 58.43%. The bank will not make any fresh equity allotment for the next six months.

Monday, October 02, 2006

Reliance Capital buys 38 lakh shares of Jyoti Structures

The following bulk deals transactions took place at both the bourses on Friday, 29 September 2006.

Sonata Investments sold 39 lakh shares worth Rs 115.48 per share and Reliance Capital purchased 38 lakh shares worth Rs 115.48 per share of Jyoti Structures.

Source: IRIS (30 September 2006)