Reliance Capital

From Wikipedia, the free encyclopedia
Jump to: navigation, search
Reliance Capital
Type Public company
Traded as BSE500111
NSERELCAPITAL
Industry Financial services
Founded 1986
Founders Dhirubhai Ambani
Headquarters Mumbai, India
Key people Anil Ambani
(Chairman)
Products Asset Management, insurance, broking and distribution, commercial finance, other Businesses
Revenue INR75.44 billion (US$1.2 billion) (2014)
Profit INR7.47 billion (US$120 million) (2014)
Employees 18,500 (2014)
Parent Reliance Anil Dhirubhai Ambani Group
Subsidiaries Reliance Life Insurance, Reliance General Insurance, Reliance Capital Asset Management Limited,[1] Reliance Money and Reliance Consumer Finance.
Website www.reliancecapital.co.in

Reliance Capital Limited (BSE500111, NSERELCAPITAL) is an Indian diversified financial services holding company promoted by Reliance Group.[2][3]

It is one of the largest financial services companies in India by market capitalization. Reliance Capital also ranks among the top private sector financial services and banking groups, in terms of net worth in India. The company is a constituent of MSCI India and CNX Junior Nifty. As of July 2014, Reliance Capital’s market capitalisation was overINR160 billion (US$2.6 billion), ahead of Bajaj Holdings, L&T Finance promoted by Larsen & Toubro and Muthoot Finance. As on March 31, 2013, Reliance Capital had assets worth INR455.28 billion (US$7.4 billion), a 16-fold increase in 8 years and net worth of INR124.83 billion (US$2.0 billion).[4][5]

Reliance Capital has interests in asset management and mutual funds; life insurance and general insurance; commercial finance; stock broking; wealth management services; distribution of financial products; private equity; asset reconstruction; proprietary investments and other activities in financial services. The company operates across India and has over 20 million customers and workforce of approximately 18,500 as of March 31, 2014.[6]

Anil Ambani, promoter of Reliance Group is the Chairman of Reliance Capital, while Amitabh Jhunjhunwala is the Vice-Chairman and Sam Ghosh is the Chief Executive Officer.[7]

History[edit]

Chairman Anil Ambani during Reliance Group AGM at Mumbai in 2012.

Reliance Capital Limited was incorporated in year 1986 at Ahmedabad in Gujarat as Reliance Capital & Finance Trust Limited. The name Reliance Capital came into effect from January 5, 1995.

In 2002, Reliance Capital Ltd shifted its registered office to Jamnagar in Gujarat before it finally moved to Mumbai in Maharashtra, in 2006.[8]

In 2006, Reliance Capital Ventures Limited merged with Reliance Capital and with this merger the shareholder base of Reliance Capital rose from 0.15 million shareholders to 1.3 million. Reliance Capital entered the Capital Market with a maiden public issue in 1990 and in subsequent years further tapped the capital market through rights issue and public issues. The equity shares were initially listed on the Ahmedabad Stock Exchange and The Stock Exchange Mumbai.

Presently the shares are listed on The Stock Exchange Mumbai and the National Stock Exchange of India.[9]

Non-Banking Finance Company[edit]

Reliance Capital obtained its registration as a Non-banking Finance Company (NBFC) in December 1998. Reliance Capital has since diversified its activities in the areas of asset management; life and general insurance; commercial finance; stock broking; private equity and proprietary investments; asset reconstruction; distribution of financial products and other activities in financial services.[10]

Credit Rating[edit]

Reliance Capital had a net debt equity ratio of 1.82 as on March 31, 2014. It is one of the top most rated Indian financial institutions and enjoys the highest ratings of ‘A1+’ by ICRA and CRISIL, for its short term borrowing program and ‘CARE AAA’ by CARE for its long term borrowing program.[11][12]

Operations[edit]

Reliance Capital offers a range of financial services in many business lines. The company is one of the most diversified financial services firms in India with interests expanding from asset management, insurance, commercial finance, broking, private equity to other niche financial services.

The prominent businesses are as follows.[13]

Reliance Capital Asset Management[edit]

Reliance Capital Asset Management (RCAM) managed INR1.94 trillion (US$31 billion) as on March 31, 2014, across mutual funds, pension funds, managed accounts and offshore funds. RCAM manages Reliance Mutual Fund (RMF), which is amongst India’s top three Mutual Funds, with Average Assets under Management (AAUM) of INR1.13 trillion (US$18 billion) for June 30, 2014. Sundeep Sikka is the CEO of Reliance Capital Asset Management.[14][15] Reliance Mutual Fund is the first Indian Mutual Fund to have crossed the Rs. 1 trillion AUM mark.[16] It has the largest customer base of over 5 million investor folios that are served from offices spread over 175 locations in India with over 42,500 distributors.

RMF has 55 schemes - 21 equity oriented schemes, 29 debt oriented schemes, 4 exchange traded funds and 1 funds-of-funds. Reliance manages some of the most successful schemes in terms of returns. As on March 31, 2014, RMF had conducted more than 2,500 Investor Awareness Programs, covering over 50,000 participants, which was highest in the Industry.

It is also the leading AMC in garnering AUMs from ‘beyond Top 15 cities’ category (18% share in total AUMs).[17][18]

In September Reliance Capital Asset Management and Japanese financial services major Nissay have joined hands to launch two mutual fund products for the Japanese retail investors. The two funds –Short Term Indian Bond Fund and India Equity Selection Fund — will enable Japanese retail investors to participate in the India growth story.[19]

Reliance Life Insurance[edit]

Reliance Life Insurance is among the top private sector life insurance players in terms of new business premium with a market share of 7% of the private sector.[20] The total premium was INR42.57 billion (US$690 million) for the year ended March 31, 2014.[21] Reliance Life offers products that fulfill savings and protection needs of millions of Indians.

Reliance Life is the only life insurance player in India to be certified with ISO 2000 9001 for all its processes and first life insurance company to introduce OTC process. Reliance Life offers 22 products, of which 16 are targeted at individuals and 6 at group business.

The distribution network stood at over 900 offices as on March 31, 2014.[22]

Reliance General Insurance[edit]

Reliance General Insurance is one of the top five private sector general insurance companies in India in terms of gross written premium with a private market share of 7.5%. RGI offers insurance solutions for auto, health, home, property, travel, marine, commercial and other specialty products.

The Gross Written Premium for the year ended March 31, 2014 was at INR24.42 billion (US$400 million) with a distribution network composed of over 125 branches and nearly 15,500 intermediaries.[23][24]

Reliance Commercial Finance[edit]

Reliance Commercial Finance is amongst the leading lenders in Indian non-banking finance sector. RCF offers a wide range of products which include Home loans, Loans against property, Small and Medium Enterprises loans, Vehicle loans, Loans for construction equipment and Infrastructure financing.

The company had a loan book at INR136.67 billion (US$2.2 billion)as on March 31, 2014, with over 66,000 customers across top 37 Indian metros.[25][26]

Reliance Broking and Distribution Business (Reliance Money)[edit]

Reliance Money is one of India’s leading brokerage and distributor of financial products and services, providing customers with access to equities, equity options and commodities futures, mutual funds, IPOs, life and general insurance products, offshore investments, wealth management products, investment banking, gold coins and financial services like money changing and money transfer. Reliance Money has generated revenues of INR3.5 billion (US$57 million)for the year ended March 31, 2014 with a pan India presence with over 7,000 outlets; nearly 7,30,000 broking accounts generating a daily average turnover of approx. Rs. 2,100 crore.[27][28]

Reliance Asset Reconstruction[edit]

Reliance Asset Reconstruction is the premier asset reconstruction company, the principal sponsor/shareholder of which is the Reliance Group (through Reliance Capital). As on March 31, 2014, the asset base was over INR6.8 billion (US$110 million).[29][30]

Major Deals[edit]

Reliance Capital is known to have struck some of the biggest deals in the Indian financial services sector.

In 2011, Reliance Capital sold 26% stake in its life insurance business - Reliance Life Insurance - to Nippon Life Insurance (Nissay), amongst the world's largest life insurer with an AUM of over 600 billion. The transaction was completed at Rs. 3,062 crore for 26 per cent stake, valuing Reliance Life Insurance at $2.6 billion.[31][32]

This was the largest deal in the insurance sector in India. Recently, the government of India has announced 49% foreign holding in Indian insurance firms, up from the 26% holding allowed earlier.[33]

In 2012, Nippon Life Insurance bought 26% stake in Reliance Capital Asset Management for Rs. 1,450 crore, making it the biggest inward stake buy in the mutual fund industry. The deals were lauded in the Indian financial services sector in India by analysts. Value Research, a major financial research firm lauded this strategic stake sale by Reliance Capital to Nippon Life Insurance in two of its businesses.[34][35][36]

Industry players also believe that such high value and credible deals struck by Reliance Capital has helped increase the valuations of the Indian financial services space in the prolonged global economic slowdown and after the Lehman triggered financial crisis.[37]

Reports indicate that Reliance Capital is also planning to sell 26% stake in its general insurance business - Reliance General Insurance - at an appropriate time.[38] India's leading financial daily Economic Times wrote, since Reliance General Insurance is one of the leading players, the proposed stake sale is expected to generate handsome capital gains for Reliance Capital. The de-leveraging of the balance sheet and ongoing restructuring should help Reliance Capital conserve capital and generate better return ratios. A leaner company will also mean that it will be able to grow faster when the business environment turns favourable once again.[39]

After the recent announcement by Finance Minister Arun Jaitley to increase investment limit for foreigners in Indian insurance sector to 49%, Espirito Santo said Reliance Capital is going to benefit the most from the decision due to its successful presence in both life and general insurance and ability draw appropriate valuation from foreign partners due to its diversified strength and last mile reach in financial services sector in India.[40]

Reliance Capital in July announced the merger of its global film and media services business with Prime Focus to create an entity with a combined turnover of over Rs 1,800 crore.[41]

References[edit]

  1. ^ "Reliance Mutual Fund – Reliance Capital Asset Management Limited – Mutual Funds of Reliance". Reliance Mutual Fund. 12 December 2013. Retrieved 4 July 2010. 
  2. ^ "Reliance Capital About Us". Reliance Capital. 3 July 2014. Retrieved 4 July 2014. 
  3. ^ "Reliance Capital Profile". India Infoline. 3 July 2014. Retrieved 4 July 2014. 
  4. ^ "Moneycontrol top financial cos by market capitalisation". CNBCTV18 Moneycontrol. 3 July 2014. Retrieved 4 July 2014. 
  5. ^ "Reliance Capital Profile". Rediff.com. 3 July 2014. Retrieved 4 July 2014. 
  6. ^ "Reliance Capital Factsheet". Reliance Capital. 2 May 2014. Retrieved 4 July 2014. 
  7. ^ "Reliance Capital Board". Reliance Capital. 2 May 2014. Retrieved 4 July 2014. 
  8. ^ "Reliance Capital Board". Reliance Capital. 12 May 2011. Retrieved 4 July 2014. 
  9. ^ "Reliance Capital History". The Economic Times. 12 May 2011. Retrieved 4 July 2014. 
  10. ^ "Reliance Capital NBFC". BSE. 12 May 2009. Retrieved 4 July 2014. 
  11. ^ "Reliance Capital gets top ratings from Crisil, Icra". Economic Times. 21 Oct 2011. Retrieved 14 July 2014. 
  12. ^ "Reliance Capital Rating". ICRA. 12 May 2014. Retrieved 14 July 2014. 
  13. ^ "Reliance Capital Rating". Business Standard. 12 Jul 2014. Retrieved 14 July 2014. 
  14. ^ "Reliance Capital Asset Management About Us". Reliance Capital Asset Management. 12 Jul 2014. Retrieved 14 July 2014. 
  15. ^ "MF Asset Under Management". Business Standard. 3 Jul 2014. Retrieved 14 July 2014. 
  16. ^ "MF AUM Rises". Financial Express. 2 Jul 2014. Retrieved 14 July 2014. 
  17. ^ "Small towns help Mutual Funds". Business Standard. 23 May 2014. Retrieved 14 July 2014. 
  18. ^ "Reliance MF Full Year profit up". The Hindu. 26 May 2014. Retrieved 14 July 2014. 
  19. ^ "Reliance Capital, Nippon Life launch two funds for Japanese retail investors". The Hindu business Line. 1 Sep 2014. Retrieved 17 Sep 2014. 
  20. ^ "Reliance Life about us". Reliance Life. 12 Jul 2014. Retrieved 14 July 2014. 
  21. ^ "Article of Reliance Life". Livemint. 27 June 2014. Retrieved 14 July 2014. 
  22. ^ "Reliance Life". Indiainfoline. 24 June 2014. Retrieved 14 July 2014. 
  23. ^ "Reliance General About Us". Reliance General Insurance. 12 July 2014. Retrieved 14 July 2014. 
  24. ^ "Reliance General Insurance profitability". The Economic Times. 6 July 2014. Retrieved 14 July 2014. 
  25. ^ "Reliance Commercial Finance". Reliance Commercial Finance. 12 July 2014. Retrieved 14 July 2014. 
  26. ^ "Reliance Commercial Finance profitable". Business Standard. 12 July 2014. Retrieved 14 July 2014. 
  27. ^ "Reliance Securities". Reliance Securities. 12 July 2014. Retrieved 14 July 2014. 
  28. ^ "Reliance Money". Reliance Money. 12 July 2014. Retrieved 14 July 2014. 
  29. ^ "Reliance Asset Reconstruction". Reliance Asset Reconstruction. 12 July 2014. Retrieved 14 July 2014. 
  30. ^ "Asset Reconstruction companies in India". Top CA Firms. 28 May 2014. Retrieved 14 July 2014. 
  31. ^ "Reliance Life Nippon Life". Reliance Capital. 9 October 2011. Retrieved 15 Jul 2014. 
  32. ^ "Reliance Life Nippon Life". WSJ.COM. 9 October 2011. Retrieved 15 Jul 2014. 
  33. ^ "Reliance Life Nippon Life". Samachar. 14 September 2011. Retrieved 1 April 2014. 
  34. ^ "RCAM stake sale to Nippon Life". Reliance Capital. 22 March 2012. Retrieved 1 April 2014. 
  35. ^ "Nippon Life to Invest in Reliance Capital Asset Management". WSJ. 22 March 2012. Retrieved 15 Jul 2014. 
  36. ^ "Nippon Life to Invest in Reliance Capital Asset Management". ET. 15 March 2012. Retrieved 15 Jul 2014. 
  37. ^ "Reliance Life deal". ET. 15 March 2012. Retrieved 15 Jul 2014. 
  38. ^ "Reliance General stake sale". Hindu Business Line. 12 Nov 2013. Retrieved 1 April 2014. 
  39. ^ "Reliance General stake sale". Hindu Business Line. 24 March 2014. Retrieved 15 Jul 2014. 
  40. ^ "Reliance Capital will benefit most from Government decision on insurance FDI". Moneycontrol.com. 24 March 2014. Retrieved 15 Jul 2014. 
  41. ^ "Rel Cap announces media arm merger with Prime Focus". Moneycontrol.com. 24 March 2014. Retrieved 15 Jul 2014.