Reliance Capital Blog

Reliance Capital, India's Berkshire Hathaway

Tuesday, September 30, 2008

Reliance Money gets nod to acquire 10 pc stake in NMCE

Financial services firm Reliance Money has obtained approval from Ministry of Consumer Affairs to acquire a 10 per cent stake in the Nati
onal Multi-Commodity Exchange of India (NMCE) Board.

"We are pleased with this development, as it marks our foray into the national commodity exchange space that is expected to cross an annual turnover of Rs 74 lakh-crore (volume) by next year," Reliance Money Director & CEO Sudip Bandyopadhyay said in a statement here today.

Reliance Money had proposed to acquire a total of up to 26 per cent stake in NMCE in two phases. NMCE had accordingly applied for necessary approvals from the regulator Forward Markets Commission (FMC), which in turn, recommended the acquisition to the Ministry of Consumer Affairs.

The Anil Ambani-led Reliance ADAG is the first large business group to get into the commodity exchange space in India.

"We believe that this strategic tie-up between Reliance Money and NMCE will help us utilise the vast growth potential of commodity trading business in India to its optimum," he said.

"We are also set to leverage our wide distribution network of 10,000-plus outlets across 5,165 cities and towns to add value to NMCE," Bandyopadhyay, who has been inducted on the NMCE Board as an Additional Director, said.

Tuesday, September 16, 2008

Anil Ambani wants to enter banking business

Reliance-Anil Dhirubhai Ambani Group, or R-Adag, plans to enter the banking sector when the industry opens up and infuse Rs2,000 crore in its two insurance arms, besides venturing into asset reconstruction, institutional broking and private equity, chairman Anil Ambani said on Tuesday.

R-Adag’s businesses include telecommunications, financial services, power and utilities and entertainment.

Charting the future plans of Reliance Capital Ltd before its shareholders, Ambani said the company will enter the banking sector, “as and when the regulatory environment permits”. Under the current law, industrial houses are not allowed to start a bank in India.

In the next three-five years, the company will aim at more than tripling its customer base to 50 million, increasing the distribution reach from 4,000 locations to 20,000 locations and doubling the cumulative investment in its two insurance firms—Reliance Life Insurance Co. Ltd and Reliance General Insurance Co. Ltd—to Rs4,000 crore.
The conglomerate will also set up a separate housing finance subsidiary and a non-banking finance unit.

“We have already filed applications with the regulators concerned in this respect and are awaiting their approval,” said Ambani who is also planning to start a ‘Reliance Capital University’ to train financial services professionals.

The group has also identified opportunities for cross-selling Reliance Capital products to other R-Adag customers—such as offering life insurance to energy customers and marketing Reliance mutual fund plans to telecom subscribers. A new company called Reliance Capital Services was set up in July for cross-selling financial services to shareholders, customers and other stakeholders.
Reliance Infrastructure Ltd, India’s third largest utility company, plans to bid for engineering and construction contracts for atomic power stations, he told shareholders.

The Mumbai-based company will also explore setting up equipment manufacturing facilities for power generation in India, West Asia, Africa and Southeast Asia.
The group is pursuing opportunities in steel, shipping and cement but that will be independent of Reliance Infrastructure, said Ambani, who plans to invest Rs40,000 crore to set up a steel factory in Jharkhand.

Ambani also referred to the US credit crisis that has felled financial powerhouse Lehman Brothers Holdings Inc. and forced Merrill Lynch and Co. Inc. to sell itself to Bank of America Corp.

“The single biggest risk facing the global markets is the multi-dimensional credit crisis in the US, which has already caused major financial casualties,” Ambani said.
He quickly added that the impact on India was likely to be “far more moderate” because of the “calibrated, cautious and conservative approach of our policy planners”.

Rel Cap to invest Rs 2,000-cr in insurance, enter PE, ARC biz

Anil Dhirubhai Ambani Group company, Reliance Capital, plans to enter the asset reconstruction, institutional broking, housing finance and PE businesses and would besides invest Rs 2,000-crore in its insurance businesses, the company's Chairman, Anil Ambani, said here today.

"Reliance Capital would enter the banking sector as and when regulations permit. The company would also enter the asset reconstruction, institutional broking and PE business. We may set up a housing finance subsidiary and a non-banking finance company," Ambani told shareholders at the company's annual general meeting (AGM) here.

"We plan to invest Rs 2,000 crore in our insurance business, taking our cumulative investment to over Rs 4,000- crore, or nearly USD 1-billion," Ambani said, adding that the company has identified areas where it has experienced higher expenses and claims and is in the process of re-pricing the risk.

"We are also looking at getting into newer segments of liability insurance as well as marine and hull insurance," he added.

Going forward, the company plans to set up a separate housing finance subsidiary and non-banking finance company (NBFC) for the consumer finance business.

"We have already filed applications with the concerned regulators in this respect and are awaiting their approvals," he said.

Monday, September 08, 2008

Reliance Money enters US market

Expanding its reach to American markets, Anil Ambani group's brokerage and financial services distribution entity Reliance Money has forged an alliance with the third largest online broker in the US, OptionsXpress.

The partnership would enable Indian investors to access the US stock market, while at the same time, NRIs and persons of Indian origin there would also be able to trade in Indian stock market, Reliance Money CEO Sudip Bandyopadhyay told PTI.

Besides, R-Money could use this opportunity as a starting point for further expanding its presence in the US and Canadian markets, he said.

R-Money has already similar tie-ups in the UAE, Saudi Arabia and Hong Kong and plans to expand its operations in other countries as well.