Reliance Capital Blog

Reliance Capital, India's Berkshire Hathaway

Sunday, February 25, 2007

Coming soon: Co-branded ATMs

ATM deployment is set to gain scale with the Anil Ambani group's Reliance Capital and a few technology firms joining hands with partner banks to launch co-branded (known as partial white-label) ATMs.

A white-label ATM is a US term that refers to ATMs run by non-banking entities. Partial white-label ATMs refer to those that are run jointly by banks and non-financial entities.

The first of such ATMs is expected in three or four months, with the Reserve Bank of India (RBI) giving preliminary clearances to UTI Bank and Yes Bank.

UTI Bank is working out the details with Chennai-based Financial Software and Systems (FSS) and US-based E-Funds, while Yes Bank has an arrangement with Reliance Capital.

FSS initially plans to install 1,000-1,500 co-branded ATMs. FSS officials said the ATMs and ATM infrastructure would be under the FSSNeT brand, though discussions with UTI Bank are still to take final shape.

A senior UTI Bank official said the bank would be the sponsor bank as the licence would be issued to it. It would also be the cash-supplying and cash settlement bank. UTI Bank plans to partner three to four companies.

A Yes Bank spokesperson said, "We are at a preliminary stage. We are exploring opportunities and talking to a lot of people including Reliance Capital."

The RBI has chosen to allow partial white-label ATM licences as it is reluctant to issue ATM licences to non-banking entities. In this case, the licences will be issued to banks, but the ATMs will be owned and operated by non-banks and the ATM sites will be jointly branded.

Final details of the partial white-label ATM policy, such as the extent of branding allowed to and space to be occupied by the non-bank brand, are expected shortly.

The central bank's intention behind allowing part-white label ATMs is to ensure that this alternative banking channel spreads fast in smaller cities.

The current installed base of ATMs is 21,142 (at the end of March 2006). Commercial banks had 54,791 branches on March 31, 2006, putting the ATM-to-branch ratio at 38 per cent. But bankers say the number should be two to three times the number of branches.
Bankers expect a 20-40 per cent cost saving as the capital expenditure and recurring expenditure would be borne by the companies setting up ATMs and banks would have to pay only variable cost per transaction.

Tuesday, February 20, 2007

Anil Ambani group ups TV Today stake to 12 per cent; ups media holding to Rs1,060 crore

The Anil Dhirubhai Ambani Group (ADAG) has acquired an additional one per cent stake TV Today Network, in a deal estimated at Rs8 crore, taking its holding in the media outfit to around 12 per cent.

Sonata Investments, a subsidiary of group company Reliance Capital, acquired 5.83 lakh shares, taking the total group holding in the media house to 69.20 lakh shares. This represents 11.93 per cent equity in TV Today, according to a filing with the stock exchanges.

The acquisition of shares in TV Today, which runs the Aaj Tak and Headlines Today news channels, were made in an open market transaction on February 19.

With TV Today shares trading at an intra-day high of Rs137.75 on February 19, Sonata might have bought the shares for about Rs8.03 crore.

Sonata had on February 12 bought a 0.96 per cent stake for around Rs6.50 crore, taking its stake to above 10 per cent in TV Today.

The TV Today scrip has shot up nearly 25 per cent since ADAG started picking up shares from the beginning of the month. The scrip, which closed at Rs100.75 on January 31, is currently trading at Rs126.51.

ADAG has been actively buying into media stocks for sometime now. The group had acquired over six per cent in Global Broadcast News (GBN), which runs the IBN7 and CNN-IBN news channels, for Rs87 crore through Reliance Capital.

Reliance Capital acquired 16.75 lakh shares, representing 6.27-per cent stake of Global Broadcast News through an open market transaction on BSE.

ADAG, which is increasing its investment in media companies, has accumulated stakes worth Rs1, 060.5 crore in two media companies - TV Today Network and Global Broadcast Network.

TV Today Network has a market capitalisation of Rs638 crore and ADA group now holds nearly 12 per cent stake in the company, valued at over Rs76.5 crore.

GBN, a recently listed company, operates the English news channelsend this article to a friend CNN-IBN and Hindi channel IBN7 and has a market cap of about Rs1,588 crore. Reliance Capital has consolidated its stake in GBN to 6.27 per cent, worth around Rs984 crore.

Saturday, February 17, 2007

ADAG accumulates stakes worth Rs 1,000 cr in media

Striving to expand its investment in media companies, the Anil Dhirubhai Ambani Group (ADAG) has accumulated stakes worth Rs 1,047.8 cr in two media companies- TV Today Network and Global Broadcast Network.

TV Today Network, broadcaster of news channels Aaj Tak and Headlines Today has a market capitalisation of Rs 638 cr and ADA group company Reliance Capital's subsidiary Sonata Investments has consolidated its holding to over 10% in the company amounting to Rs 63.8 cr.

GBN, which operates the English news channel CNN-IBN and Hindi channel IBN7, is a recently listed company and has a market cap of about Rs 1,588 cr in which ADAG'S Reliance Capital has consolidated its stake to 6.27%, amounting to around Rs 984 cr.

In an open market transaction that was carried out on February 12, Sonata Investments bought 5.57 lakh shares, taking its shareholding in TV Today to 10.27 % representing 59.57 lakh shares, a TV Today regulatory filing on the NSE shows.

Going by the intra-day high of TV Today at Rs 116.85 on February 12, Sonata Investments could have bought the shares for approximately Rs 6.50 cr.

Sonata Investments previously held 54 lakh shares in TV today, representing 9.31% stake.

Early this week, Anil Ambani Group company Reliance Capital had acquired over 6 % stake in Global Broadcast News (GBN), for an estimated Rs 87 cr.

After the said transaction, Reliance Capital holds 6.27 per cent of the equity share capital of GBN.

Reliance Capital acquired 16.75 lakh shares, representing 6.27 per cent stake of Global Broadcast News through an open market transaction on BSE.

Friday, February 16, 2007

ADAG ups stake in TV Today to over 10%

Striving to expand its investment in media companies, the Anil Ambani Group has increased its stake in TV Today Network to over 10 per cent by acquiring an additional 0.96 per cent stake for an estimated Rs 6.50 crore.

In an open market transaction that was carried out on February 12, ADA Group company Reliance Capital's subsidiary Sonata Investments bought 5.57 lakhs shares, taking its shareholding in the media company to 10.27 per cent representing 59.57 lakh shares, a TV Today regulatory filing on the NSE shows.

Wednesday, February 14, 2007

Reliance Capital is principal agent of Western Union

Global money transfer service provider Western Union Wednesday announced that Reliance Capital Ltd, the Anil Dhirubhai Ambani Group financial services firm, has become one of its principal agents in India.

This development came after Reliance Capital acquired 100-percent stake in the Kuoni Group's foreign exchange unit Travelmate Services (India) Pvt Ltd in November 2006.

Travelmate was Western Union's principal agent for over 10 years.

The 36,000-strong Western Union agent location network comprises over 3,000 Travelmate locations.

'Western Union's association with Reliance Capital, one of the leading business groups of India, is a very significant benchmark for us at Western Union,' Anil Kapur, South Asia managing director of Western Union Financial Services said.

'We are looking forward to a mutually beneficial and long-term relationship with Reliance Capital,' he added.

Reliance Capital ranks among the top three private sector financial services and banking companies in terms of net worth.

Tuesday, February 13, 2007

Reliance Capital picks 6% stake in GBNAnil Ambani group company Reliance Capital (Q, N,C,F)* acquired over 6% stake in Global Broadcast News (GBN)

Anil Ambani group company Reliance Capital acquired over 6% stake in Global Broadcast News (GBN), which operates the English news channel CNN-IBN and Hindi channel IBN7, report agency sources.

The company acquired 16.75 lakh shares, representing 6.27% stake of Global Broadcast News through an open market transaction on BSE yesterday.

Reliance Capital consolidated net profit increased 36.89% to Rs 921.70 million for the quarter ended Dec. 31, 2006 and total income jumped 2.90 times to Rs 4360.50 million for the same period.

On a stand-alone basis, the company reported a rise of 11.60% in net profits to Rs 725.70 million for the quarter ended Dec 2006 compared with Rs 649.80 million for the quarter ended Dec 2005.

In terms of net worth, RCL ranks among the top 3 companies in the private financial services and banking sector in the country.

Shares of the company closed down Rs 31.35, or 4.67% at Rs 639.30. Total volume of shares traded at the BSE was 653,731 (Tuesday)

Reliance Capital bought 500,000 shares of Avaya Global

Today At BSE, Reliance Capital bought 500,000 shares at Rs. 250 per share

Tuesday, February 06, 2007

Reliance Capital buys smallcap and midcap stocks

A number of smallcap and midcap stocks have been bought by Reliance Capital in the last one month, reports CNBC-TV18.

Among the smallcaps, Reliance Capital bought 3.82 lakh shares (4.3% stake) of Alkyl Amines at Rs 90 per share.

Alkyl Amines has a market capital of Rs 86 crore and manufactures amine-based chemicals. The chemicals that it manufactures are used in Pharma, agrochem, rubber chem and water treatment industries.

Another smallcap stock that Reliance Capital bought was Everest Industries. It bought 11.76 lakh shares (7.9% stake) at Rs 120 per share. Everest industries is an ACC Group company and has a market capital at Rs 180 crore. It is an asbestos and non-asbestos product manufacturer. Franklin India Smaller Companies Fund controls 7.23% stake in it.

Reliance Capital also bought 9.98 lakh shares (2.4% stake) of a smallcap stock- JK Industries at Rs 136 per share. JK Industries has a market capital at Rs 620 crore and manufactures automobile tyres and bulk drugs. It also markets agricultural products. Fidelity Mauritius Fund controls 5.87% stake in it.

Another smallcap stock it bought was Wyeth of which Reliance Capital bought 1.50 lakh shares (0.66% stake) at Rs 505 per share. Its market cap is at Rs 1,141 crore and its engaged in the pharma business. Citigroup, HSBC, Prudential ICICI Trust control over 1% stake each.

Among the midcap stocks, Reliance Capital bought 15 lakh shares of MTNL at Rs 164.01 per share. It also bought 8.40 lakh shares of TV Today at Rs 87.13 per share as well as 5 lakh shares of Mangalam Cement at Rs 235 per share.

Reliance Capital has also bought 4.50 lakh shares of EIH Assoc Hotels at Rs 178 per share. Besides that Rallis India’s 1.76 lakh shares at Rs 285 per share have also been bought by it.

It has sold 4.98 lakh shares of Century Textiles at Rs 705.79 per share.

Saturday, February 03, 2007

Reliance unseats UTI, tops mutual heap

For the second time in seven months, the once-invincible UTI Mutual Fund has lost its leadership position in the mutual fund size stakes.

Reliance Mutual Fund has become India’s largest in terms of asset under management, drawing in Rs 39,019.94 crore as of January 31, 2007. This was primarily due to a 5.67% rise in corpus in January and the success of its Long Term Equity Fund, which was launched in December and collected Rs 2100 crore.

UTI saw a drop in the assets by 1.5% to Rs 37,535.08 crore. Prudential ICICI, which had unseated UTI in July last year, maintained its third position with assets of Rs 34,745.72 crore.

The total assets held by the Indian mutual fund industry swelled by nearly 5% to Rs 3,39,662.5 crore, as more retail investors joined the merry-making on bourses.

Sameer Kamdar, country head, mutual funds, Mata Securities, said nearly Rs 2,300 crore was diverted to five new fund offers in January. Fixed maturity plans continued to dominate fund flows.

“Most investors prefer locking their money in FMPs to take advantage of the high yields because of the high short-term rates,” Kamdar said.

Also, liquid funds have done well as money redeemed by corporates and banks for advance tax payments flowed back into the mutual fund kitty.

Vikrang Gugnani, president of Reliance Mutual Fund, says its retail growth that is driving AUMs.

He said of the total asset base, 79% or Rs 31,000 crore comes from the retail side, while institutional investors contribute the balance - with the latter are more inclined towards liquid and cash plans.

Reliance is planning aggressive expansion into 1,000 locations, including Tier-III and Tier IV cities and towns such as Aizwal and Shillong by March 2007, Gugnani said.
Reliance Capital AMC currently has reach of 124 locations currently.

The systematic investment plans (SIPs) offered by the fund have also been finding many takers. As of January, it had issued 3.5 lakh SIPs as against 85,000 in March 2006.

Jaideep Bhattacharya, chief marketing officer of UTI Mutual Fund, said corpus eroded in January because of redemptions in liquid funds.

But he said inflows into the two NFOs - Capital Protection Oriented Scheme (closed on January 25, 2007) and Long Term Advantage Fund (closing on March 20, 2007) - have not been considered in the current AUM stack-up.

The Capital Protection Scheme has garnered approximately Rs 250 crore and the fund house is expecting a corpus of Rs 2,500 crore from its Long Term Advantage plan.

Thursday, February 01, 2007

Air Deccan in fund talks with Indian groups - paper

Deccan Aviation Ltd. has approached Anil Dhirubhai Ambani group and a Delhi-based conglomerate to raise $75-$100 million, The Economic Times daily reported on Friday citing sources close to the development.

The company, which runs budget carrier Air Deccan, has given investment bank Edelweiss Capital the mandate to raise funds from an Indian business group or a clutch of private equity firms, it said.

Air Deccan officials could not be immediately reached for comment.

"The entry of a strong corporate name can change the dynamics of the marketplace," the paper quoted the company's chief operating officer, Warwick Brady, as saying.

The Anil Dhirubhai Ambani group runs Reliance Communications Ltd. and Reliance Capital Ltd. Reliance Capital, through its mutual fund arm, holds a 3.5 percent stake in Deccan.

Among the private equity funds being targeted are Texas Pacific, Carlyle Group, Standard Chartered Private Equity, Lehman Brothers and GIC of Singapore, the paper said.

Anil consolidates stake in Reliance Cap to 52 per cent

ADAG Chairman Anil Ambani has consolidated his holding in Reliance Capital and now owns the majority stake in the financial services firm, by way of conversion of warrants into equity shares.

As per a filing on the Bombay Stock Exchange, Reliance Capital today said Anil Ambani along with persons acting in concert (PACs) have increased their stake to 128,132,274 shares representing 52.16 per cent, from the existing 47.53 per cent.

By virtue of subscription for conversion of warrants into equity shares on January 31, Anil Ambani's stake went up by around 2.17 crore shares.

Persons acting in concert include --Tina A Ambani, Jaianmol A Ambani, Jaianshul A Ambani, Kokila D Ambani and a host of other enterprises.

Reliance Money mulls overseas investment product tie-up

Reliance Money, promoted by Anil Dhirubhai Ambani Group firm Reliance Capital, is mulling a tie-up with UK-based CMC Markets to allow Indian customers to invest in various overseas products like foreign equity, commodities and currency.

Reliance Money would be an exclusive partner of the UK's Internet trading platform provider in India and the tie-up would allow the customers of the ADAG group firm to buy various offshore investment products under the RBI prescribed limits, sources close to the development said.

Earlier last month, Reserve Bank had liberalised the remittance scheme for resident individuals to freely remit $50,000, from the previous remittance limit of $25,000.

Under the new scheme, resident Indians are allowed to remit up to $50,000 per financial year for any current or capital account transaction.

A Reliance Capital spokesperson declined to comment on the tie-up, while CMC Markets official could not be contacted.

However, sources said that Reliance Money would facilitate Indian clients in opening accounts and help in interaction of the Indian customers with CMC Markets.

CMC Markets offers various instruments to trade in foreign exchange, commodity, treasury products like Gold, Oil, Euro-Dollar, Wheat and T-Bond in about 75 countries.

CMC had proposed to list its shares on London Stock Exchange in May 2006, but plans were withdrawn later.

Reliance Money is being projected as a single-window access point for various investments and financial products like equities, commodities, mutual funds, IPOs, insurance, offshore Investments and credit cards.

Vasco all set to supply authentication devices

Vasco — world's largest provider of authentication security products to the financial sector — has received orders for two million user authentication devices from Reliance Money-Anil Dhirubhai Ambani Group company.

The device will enhance security system for online traders. Reliance Money, promoted by Reliance Capital, is a financial supermarket which would allow its customers to trade in equity, commodity derivative, mutual funds, IPOs, life and general insurance products, offshore investments and credit cards.

The new device, Digipas, will act as third level security. The instrument will continuously generate a six-digit number that will change every 10 seconds. A customer of Reliance Money will be required to type in — apart from username and password — the number flashed on his personalised digital token at that time. As his set is synchronised with the main server, the machine will allow him to log-in only if the number fed by him matches with the number generated by server.

George Soros ups stake in Reliance Capital

Legendary investor George Soros, through its Quantum Fund, has increased his stake in Reliance Capital Ltd. to more than 5%. Quantum’s purchase has pushed the FII holding in Reliance Capital to over 30%.

The other major foreign investors in the company are Morgan Stanley (4.48%), Goldman Sachs (4.13%), Merrill Lynch (1.82%), and HSBC (1.75%). The ADA group owns 52% in Reliance Capital.

Quantum held a 4.8% stake in Reliance Capital at the end of December 2006, as per the data published on the web site of the Bombay Stock Exchange (BSE).

Quantum also holds about 11% in the Asset Reconstruction Company (ARC) floated by Reliance Capital. It had picked up the stake in the ARC in November last year.

Soros’ Mauritius-based fund has already invested over US$20mn in various Indian real estate, infrastructure and healthcare companies in the last 12 months.

The US-based investment guru and philanthropist reportedly is the chairman of Soros Fund Management, a private equity fund that manages over US$21bn. Soros is also planning to set up a new fund for Asia and Anil Ambani is believed to have committed to invest US$500mn in it.

Reliance Capital net rises 12% to Rs 73 cr

Reliance Capital (RCL) consolidated net profit for the quarter ended December 31, 2006, rose 37% to Rs 92 crore, as compared with the same period of the previous year. The rise in net profit, however, was muted, compared with the 190% year-on-year climb in consolidated total income at Rs 436 crore.

At the standalone level, the company reported a net profit of Rs 72.6 crore for the quarter, up 12%, over the previous year. Standalone quarterly income rose 46% to Rs 121.2 crore. A robust growth in topline was matched by an equally significant rise in operating expenses which nearly trebled to Rs 23.3 crore. The company said operating expenses included staff cost of Rs 12.79 crore and other expenditure of Rs 10.6 crore.

The company said it is launching its stock broking business in the current quarter and will be launching distribution of financial products businesses and consumer finance in the next financial year. For the nine-month period ended December 31, 2006, consolidated net profit was up 49% to Rs 397 crore, while consolidated total income grew 149% to Rs 1,329 crore.

The growth in topline was driven by a strong performances in the asset management and insurance businesses. Premium income in the life insurance business for the nine-month period was Rs 451.2 crore, up 235%, on a year-on-year basis. Gross direct premium in the general insurance business was Rs 612 crore, up 456% y-o-y.

Reliance Capital has interests in asset management and mutual funds, life and general insurance, private equity and proprietary investments, stock broking and other activities in financial services.