Reliance Capital Blog

Reliance Capital, India's Berkshire Hathaway

Thursday, October 25, 2007

Reliance Capital Q2 net jumps 20%

Anil Ambani group firm Reliance Capital on Wednesday reported a 20 per cent jump in net profit during the second quarter this fiscal on strong growth in mutual fund, insurance and brokerage businesses.

The standalone net profit stood at Rs 201 crore during the quarter ended September 30 from Rs 167 crore in the same period last financial year. Total income grew 76 per cent at Rs 391 crore in the quarter compared to Rs 223 crore in the year-ago period, the company said in a statement.

On consolidated basis, the group's net profit witnessed a jump of four per cent to Rs 200 crore compared to Rs 192 crore in the same period last fiscal. Total income increased 77 per cent to Rs 953 crore in the quarter under review, as against Rs 537 crore in the corresponding period last fiscal.

During the first half this fiscal, the group posted a 72 per cent jump in net profit at Rs 525 crore compared to Rs 305 crore in the same period of 2006-07.

Total income of the financial services group more than doubled to Rs 2,129 crore in the first six months this fiscal from Rs 893 crore in the corresponding period last fiscal.

The group's life insurance business posted a more than two-fold growth in new business premium at Rs 650 crore for the first half year this year as against Rs 246 crore in the corresponding period. The general insurance business also saw gross premium more than double to Rs 946 crore as compared to Rs 348 crore in the previous period, the statement said.

Assets under management of Reliance Mutual Fund, a part of Reliance Capital, increased to Rs 70,441 crore as on September 30, while it was at Rs 28,648 crore in the same period last year.

Wednesday, October 24, 2007

Reliance Life forms tie-up with Muthoot Group

Anil Ambani group's Reliance Life Insurance on Wednesday signed a distribution partnership with domestic non-banking finance firm Muthoot Group.

Under the pact, Muthoot Group would offer Reliance Life's insurance solutions to customers spanning 23 cities and 40 branches across Karnataka, Andhra Pradesh and Maharashtra.

The agreement to this effect was signed between Reliance Life Insurance Company chief executive officer P Nandagopal and Muthoot Group managing director George Alexander in Bangalore.

Post-alliance, Muthoot Group is expected to contribute over 12 per cent of overall business generated by Reliance Life through this channel, the ADAG firm said in a statement.

"Reliance Life is keen on optimising the immense potential of south India, which is a key market for us. With over 35 per cent of life insurance business coming from the area, it was inevitable that we strengthen our position here and tap alternate channels of distribution," Nandagopal said.

The Muthoot Group MD said: "This alliance will help Reliance Life leverage our distribution network optimally, while offering us an opportunity to enhance our product portfolio."

Reliance Life, a part of ADAG's financial services arm Reliance Capital, ranks among India's top five private sector life insurance companies.

The company's business premium including renewal premium had grossed over Rs 1,000 crore. It has a distribution network of over 340 branch offices across the country along with a workforce of 9,000 employees and over 1,10,000 agents.

Muthoot Group, founded in 1887, is a leading business groups in south India with interests in finance, healthcare, education, hospitality, real estate, agriculture, automobile and manufacturing among other sectors.

R-Money stokes price war with free trading a/c

Anil Ambani group’s Reliance Money today sparked a price war in the highly competitive brokerage space by offering a free trading account to its demat account holders, with the aim to tap up to 30 crore potential clients.

The brokerage and financial products distribution arm of Reliance Capital said that it was offering a free trading account for a year, with which one could trade in shares worth Rs 5 lakh. Earlier, it was charging a flat fee of Rs 500 for trading up to Rs five lakh in a year.

Reliance Money was the first company in the country to offer a flat fee structure for trading in stocks, commodities and other instruments, as against the industry practice of charging a certain percentage of the transaction as brokerage fees.

The industrywise brokerage fees average around 0.5 per cent for delivery-based equity trades, which would amount to Rs 2,500 for a transaction worth Rs five lakh. Leading brokerages such as ICICI Direct and HDFC Securities charge 0.25-0.75 per cent on delivery-based equity trades.

The offer would be available to those opening a demat account with Reliance Money in the next few weeks, the company said.

Those seeking to trade beyond Rs 5 lakh would have to pay Rs 500 for trading up to Rs 1 crore (for 2 months) or Rs 2,500 for Rs 6 crore (for a year), it added.

“We expect to add more than two lakh demat accounts with this offer. Our entire effort is focused on getting the not-so-savvy semi-urban and rural investor to participate in the stock market, in addition to the savvy investors who are already trading on one or the other platform,” Reliance Money CEO Sudip Bandyopadhyay said.

Reliance Money has an account opening fee of Rs 750 and a demat account annual fee of Rs 50.

Monday, October 15, 2007

Reliance MF launches Gold ETF

Reliance Anil Dhirubhai Ambani (R-ADAG) group firm Reliance Mutual Fund today launched Gold ETF (exchange traded fund), designed to provide returns that closely correspond to returns provided by domestic prices of gold.

Gold ETF is a security listed on the stock exchange, through which investors can participate in the gold bullion market without the compulsion to take the physical delivery of gold.

The new fund offer (NFO) opened for subscription today and will close on November 1. During the NFO period, an investor can invest with a minimum application amount of Rs 5000 and in multiples of Re 1 thereafter. All gold bullion held in the scheme's allocated account with the custodian shall be of purity 995 parts per 1000 (99.5%) or higher, the company said in a release.

Gold ETFs as a category has given returns of 7% during last one month owing to spiralling gold prices. As of today, Benchmark, UTI and Kotal Mutual Fund have gold ETFs.

Sunday, October 14, 2007

Kinetic Engineering to issue Preference Shares to Reliance Capital

Kinetic Engineering Ltd has announced that the Committee of the Board of Directors of the Company at its meeting held on October 08, 2007, has passed for issue of 1,50,00,000 Redeemable Non-Convertible Non-Cumulative Preference Shares of Rs 10/- each to Reliance Capital Ltd & 865384 Optionally Convertible Cumulative Preference Shares (OCCPs) of Rs 156/- each to Micro Age Instruments Pvt Ltd, Subject to obtaining approval of shareholders of the Company.

Each OCCPs is convertible into one fully paid up equity shares of the face value of Rs 10/- each at a premium of Rs 146/- per equity shares at the option of Micro Age Instruments Pvt Ltd which option is to be exercised within 18 months from the date of allotment of OCCPs. It is proposed to convene Extra Ordinary General Meeting of the members on November 06, 2007 seeking its approval of this and other items.