Reliance Capital

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Reliance Capital
Public company
Traded as BSE500111
NSERELCAPITAL
Industry Financial services
Founded 1986
Founder Dhirubhai Ambani
Headquarters Santacruz, Mumbai, India
Key people
Anil Ambani
(Chairman)
Anmol Ambani
(Executive Director)
Products Asset Management, insurance, broking and distribution, commercial finance, other Businesses
Revenue 50.86 billion (US$790 million) (2017)
Profit 4.60 billion (US$72 million) (2017)
Number of employees
15, 595 (2017)
Parent Reliance Anil Dhirubhai Ambani Group
Subsidiaries Reliance Nippon Life Asset Management Limited Reliance Nippon Life Insurance, Reliance General Insurance, Reliance Commercial Finance, Reliance Securities, Reliance Asset Reconstruction, National Pension System, International Businesses [1]
Website www.reliancecapital.co.in

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

Reliance Capital, a constituent of Nifty Midcap 50 and MSCI Global Small Cap Index, is a part of the Reliance Group. It is amongst India’s leading and most valuable financial services companies in the private sector. As on March 31, 2017, the net worth of the company stood at Rs 16,548 crore, while its total assets as on the date stood at Rs 82,209 crore. [4] [5]

Reliance Capital has businesses in asset management, mutual funds, life insurance and general insurance, commercial finance, home 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 15, 595 as of May 1, 2017.

Anil Ambani, promoter of Reliance Group is the Chairman of Reliance Capital, while Amitabh Jhunjhunwala is the Vice-Chairman and Anmol Ambani as the Executive Director. [6]

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.[7]

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.[8]

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.[9]

Credit Rating[edit]

Reliance Capital has a net debt equity ratio of 1.88 as of March 31, 2017. [10] 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 Nippon Life Asset Management[edit]

Reliance Nippon Life Asset Management - RNAM (formerly Reliance Capital Asset Management Limited) is one of the largest asset manager in India and manages and advises Rs. 3,58,059 crore as per March, 2017, across mutual funds, pension funds, managed accounts, alternative investments and offshore funds. RNAM is the only AMC to have the mandate for fund management by EPFO, PFRDA and CMPFO.

RNAM is the asset manager of Reliance Mutual Fund (RMF) Schemes. Sundeep Sikka is the Executive Director & Chief Executive Officer of RNAM.

As per Mar’17, RMF manages the highest assets from ‘beyond Top 15 cities’ category across all AMCs in the Industry.

RNAM acts as the advisor for India focused Equity and Fixed Income funds in Japan (launched by Nissay Asset Management) and Korea (Samsung Asset Management). RNAM also manages offshore funds through its subsidiaries in Singapore and Mauritius thereby catering to investors across Asia, Middle East, UK, US, and Europe

Reliance Nippon Life Insurance[edit]

Reliance Nippon Life Insurance Company is among the leading private sector life insurance companies in India in terms of individual WRP (weighted received premium) and new business WRP. The company is one of the largest non-bank supported private life insurers with over 10 million policy holders, a strong distribution network of over 700 branches and over 75,000 advisors as on March 31, 2017. The company holds one of the top Claim Settlement Ratios in the industry which stands at 95.21% as of March 31, 2017.[14]. [15]

Ashish Vohra is the Executive Director & Chief Executive Officer of RNLI. [16]

Rated amongst the Top 4 Most Trusted Life Insurance Service Brands by Brand Equity‘s Most Trusted Brands Survey 2016, the company’s vision is “To be a company people are proud of, trust in and grow with; providing financial independence to every life we touch.” With this in mind, Reliance Nippon Life caters to five distinct segments, namely Protection, Child, Retirement, Saving & Investment and Health; for individuals as well as Groups/Corporate entities.

In FY'16, post the enabling regulations, Nippon Life increased its stake in Reliance Life from 26% to 49%, subsequent to the receipt of all regulatory approval. Nippon Life Insurance, also called Nissay, with 25% market share is Japan's largest private life insurer. The Company, with over 29 million policies in Japan, offers a wide range of products, including individual and group life and annuity policies through various distribution channels and mainly uses face-to-face sales channel for its traditional insurance products. The company primarily operates in Japan, North America, Europe and Asia and is headquartered in Osaka, Japan. It is ranked 114th in Global Fortune 500 firms in 2016.

Reliance General Insurance[edit]

Reliance General Insurance Company Limited
Public Listed Company
Industry Insurance
Founded 2001
Headquarters Mumbai, India
Key people
Rakesh Jain Executive director & CEO
Products General insurance, Vehicle Insurance, Health Insurance, Travel Insurance, Home insurance
Parent Reliance Capital
Website www.reliancegeneral.co.in

Reliance General Insurance Company Limited is an Indian insurance company, part of Reliance Capital Ltd. The firm has a 7.3% market share in private sector and has the largest agency channel with over 24,500 agents. The CEO and Executive Director is Rakesh Jain. [17]

The company has strengthened and diversified its distribution network by forging partnerships with major banks. Reliance General Insurance is an active participant in various government crop Insurance schemes – including the Pradhan Mantri Fasal Bima Yojna and has insured over 3 million farmers under this financial inclusion initiative. The total Gross Written Premium (GWP) for the year, ended March 31, 2017, was 40.07 billion (US$620 million).[18][19] Reliance General Insurance (RGI) offers insurance solutions for auto, health, home, property, travel, marine, commercial and other specialty products.[20]

Reliance Commercial Finance[edit]

Reliance Commercial Finance is among the leading lenders in Indian non-banking finance sector. The CEO and Executive Director of the company is Devang Mody. [21]

The company has an operational presence of over 44 locations in India and an AUM of 16759 Cr. as on March 2017. Reliance Commercial Finance offers a wide range of products which include Business Expansion Loans, Property Loans, Vehicle Loans, Construction Equipment Loans, Infrastructure, Microfinance and Agriculture Loans. The company had a loan book at ₹124.36 billion (US$2.1 billion) as on March 31, 2017, with over 268278 customers (including Microfinance) across India.[22] [23]

Reliance Home Finance[edit]

Reliance Home Finance Limited is one of India's leading and most valuable financial services companies in the private sector. [24] Ravindra Sudhalkar is the CEO and Executive Director of the company. [25]

Reliance Home Finance Limited (RHF), a 100% subsidiary of Reliance Capital, provides a wide range of solutions like home loans, LAP, Construction finance, and Affordable housing loans. The company also provides property solutions' services that help customers find their dream homes/property, along with financing. The company has a strong distribution network with over 1,750 distributors serving over 33,300 customers across 90 locations, through a hub and spoke model, across the country. [26] [27]

Reliance Capital's Broking and Distribution Business[edit]

Reliance Securities, the broking & distribution arm of Reliance Capital, is one of India’s leading retail broking houses. B Gopkumar is the Chief Executive Officer and Executive Director of its broking and distribution business. [28][29] It provides a varied customer base with access to equities, derivatives, currency, IPOs, bonds, corporate FD’s and wealth management solutions.

The Distribution business is a comprehensive financial services and solutions provider, assisting customers with access to mutual funds, insurance products and other financial products, with a pan India presence with approx. 80 branches. [30][31]

Reliance Asset Reconstruction[edit]

Reliance Asset Reconstruction is the premier asset reconstruction company, principal sponsor/shareholder of which is Reliance Group (through Reliance Capital). The AUM as on March 31, 2017 stands at Rs. 1829 crore (previous year Rs.1488 crore). [32]

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.[33][34]

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.[35]

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.[36][37][38]

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.[39]

Reports indicate that Reliance Capital is also planning to sell 26% stake in its general insurance business - Reliance General Insurance - at an appropriate time.[40] 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.[41]

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.[42]

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.[43] In the month of july 2017, it sold its 1% share in Paytm to China's Alibaba Group for Rs 275 crore, making a profit of 2,600%.[44]

See also[edit]

References[edit]

  1. ^ http://www.reliancecapital.co.in/#what_we_do
  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. ^ http://timesofindia.indiatimes.com/business/india-business/reliance-capital-q4-net-at-rs-417-crore/articleshow/58401480.cms
  5. ^ http://www.business-standard.com/article/news-ians/reliance-capital-q4-net-at-rs-417-crore-117042701057_1.html
  6. ^ http://www.reliancecapital.co.in/Board-of-Directors.aspx
  7. ^ "Reliance Capital Board". Reliance Capital. 12 May 2011. Retrieved 4 July 2014. 
  8. ^ "Reliance Capital History". The Economic Times. 12 May 2011. Retrieved 4 July 2014. 
  9. ^ "Reliance Capital NBFC" (PDF). BSE. 12 May 2009. Retrieved 4 July 2014. 
  10. ^ http://www.reliancecapital.co.in/pdf/RCL-Financial-presentation-for-FY-2016-17.pdf
  11. ^ "Reliance Capital gets top ratings from Crisil, Icra". Economic Times. 21 Oct 2011. Retrieved 14 July 2014. 
  12. ^ "Reliance Capital Rating" (PDF). ICRA. 12 May 2014. Retrieved 14 July 2014. 
  13. ^ "Reliance Capital Rating". Business Standard. 12 Jul 2014. Retrieved 14 July 2014. 
  14. ^ http://timesofindia.indiatimes.com/business/india-business/reliance-capital-q4-net-at-rs-417-crore/articleshow/58401480.cms
  15. ^ http://www.moneycontrol.com/news/business/companies/we-want-to-take-our-fifth-year-persistency-to-50-in-two-years-reliance-nippon-life-2289083.html
  16. ^ http://www.businesstoday.in/magazine/money-today/insurance/how-insurers-are-using-technology-to-ensure-a-smooth-claim-experience./story/257831.html
  17. ^ http://www.financialexpress.com/market/reliance-general-insurance-ipo-inches-ahead-files-draft-papers-with-sebi/807599/
  18. ^ http://timesofindia.indiatimes.com/business/india-business/reliance-general-insurance-eyes-acquisition/articleshow/58613282.cms
  19. ^ http://www.financialexpress.com/money/reliance-general-insurance-logs-rs-4007-cr-premium-in-fy17/644390/
  20. ^ "Reliance General Q1 gross written premium up 25% at Rs 706 crore". economictimes.com. Retrieved 2013-07-30. 
  21. ^ http://economictimes.indiatimes.com/industry/banking/finance/reliance-commercial-finance-appoints-devang-mody-as-ceo/articleshow/57628320.cms
  22. ^ http://timesofindia.indiatimes.com/business/india-business/reliance-capital-q4-net-at-rs-417-crore/articleshow/58401480.cms
  23. ^ http://www.business-standard.com/article/news-ians/reliance-capital-q4-net-at-rs-417-crore-117042701057_1.html
  24. ^ http://economictimes.indiatimes.com/markets/stocks/news/reliance-capital-gains-over-2-as-arm-posts-stellar-q4-results/articleshow/58374656.cms
  25. ^ http://www.business-standard.com/article/pti-stories/ravindra-sudhalkar-is-reliance-home-finance-s-new-ceo-116100300575_1.html
  26. ^ http://www.thehindubusinessline.com/money-and-banking/reliance-home-finance-posts-2fold-jump-in-net-profit/article9664473.ece
  27. ^ http://businessworld.in/article/-Our-Focus-Is-To-Manage-The-Customer-s-Entire-Journey-Right-From-Awareness-To-Purchase-/14-05-2017-118129/
  28. ^ http://www.business-standard.com/article/pti-stories/relcap-names-gopkumar-as-ceo-of-broking-distribution-biz-115061100619_1.html
  29. ^ http://economictimes.indiatimes.com/industry/banking/finance/reliance-capital-names-gopkumar-as-ceo-of-broking-distribution-business/articleshow/47628762.cms
  30. ^ http://www.rsec.co.in/about-us
  31. ^ https://rmoney.rsec.co.in/
  32. ^ http://www.reliancecapital.co.in/Reliance-Asset-Reconstruction.aspx
  33. ^ "Reliance Life Nippon Life" (PDF). Reliance Capital. 9 October 2011. Retrieved 15 Jul 2014. 
  34. ^ "Reliance Life Nippon Life". WSJ.COM. 9 October 2011. Retrieved 15 Jul 2014. 
  35. ^ "Reliance Life Nippon Life". Samachar. 14 September 2011. Retrieved 1 April 2014. 
  36. ^ "RCAM stake sale to Nippon Life" (PDF). Reliance Capital. 22 March 2012. Retrieved 1 April 2014. 
  37. ^ "Nippon Life to Invest in Reliance Capital Asset Management". WSJ. 22 March 2012. Retrieved 15 Jul 2014. 
  38. ^ "Nippon Life to Invest in Reliance Capital Asset Management". ET. 15 March 2012. Retrieved 15 Jul 2014. 
  39. ^ "Reliance Life deal". ET. 15 March 2012. Retrieved 15 Jul 2014. 
  40. ^ "Reliance General stake sale". Hindu Business Line. 12 Nov 2013. Retrieved 1 April 2014. 
  41. ^ "Reliance General stake sale". Hindu Business Line. 24 March 2014. Retrieved 15 Jul 2014. 
  42. ^ "Reliance Capital will benefit most from Government decision on insurance FDI". Moneycontrol.com. 24 March 2014. Retrieved 15 Jul 2014. 
  43. ^ "Rel Cap announces media arm merger with Prime Focus". Moneycontrol.com. 24 March 2014. Retrieved 15 Jul 2014. 
  44. ^ "Reliance Capital pockets a 2650% return from Paytm investment".