DE Shaw-Reliance joint venture surrenders membership on bourses

Global financial services firm had entered into a pact with RIL in 2011

The joint-venture between petroleum major Reliance Industries Ltd (RIL) and global financial services firm DE Shaw has surrendered memberships at both the BSE and the National Stock Exchange (NSE), according to separate notifications issued by the two bourses.

DE Shaw India Securities had surrendered its membership, according to a September 14, 2017, National Stock Exchange (NSE) circular. 

The last trading date is seen to be July 30, 2014. “Trading members of the exchange are hereby informed that the surrender of trading membership has been approved by Sebi,” said a separate BSE notice dated January 16, 2018. Additionally, the National Securities Depository (NSDL) also announced that the company has decided to discontinue depository operations. 

In response to a query from Business Standard, a DE Shaw spokesperson confirmed that the partnership is no longer operational. 

The two had announced the joint venture on March 2011 ‘to build a leading financial services business in India.’ The venture hoped to use DE Shaw’s investment and technological expertise while harnessing Reliance Industries’ presence across India, according to a statement at the time. 

“This joint venture will draw upon the core competencies of both firms to develop a platform that can serve the growing needs of Indian companies and individuals,” said Anil Chawla, managing director, who headed the DE Shaw Group’s Indian private equity division.

Business Standard had reported in November 2012 that the group is scaling back its private equity operations, and that Chawla had resigned. The story had noted that the number of investment professionals was down to two from the earlier 15.

“We are still invested in private equity in India. While our business is smaller than earlier and we have fewer people, that is a reflection of the changed investment climate, not our long-term interest in investing in India,” a spokesperson had told the paper in 2013.

The spokesperson said that the joint venture is no longer active, though DE Shaw maintains a presence in India.  

“The DE Shaw Group’s partnership with Reliance Industries ceased operations four years ago in 2014. However, DE Shaw remains active in India. Established in 1996, DE Shaw India is an integral part of the DE Shaw Group’s work in investment management and technology development,” said the person, in an emailed response. 

DE Shaw was founded in 1988. The group’s website shows that it has more than $47 billion in investment capital as of January 1, 2018. It is known for its hedge fund operations in particular. It has operations in North America, Europe and Asia. Reliance, in addition to its petroleum division, also has large retail and telecom operations. DE Shaw’s India entry in 1996 began with a focus on information technology. 

Subsequently, it had private equity operations and other plans, including asset management and broking. It had tied up with Reliance Industries to bring these to fruition.

Notes on the consolidated financial statements of Reliance Industries for 2017-18 show a net investment of Rs 20 million in the joint-venture.

Reliance did not respond to an email seeking a comment.

RIL's financial services JV ends

• RIL and DE Shaw had announced financial services joint-venture in 2011
• Company has surrendered memberships on bourses
• It has also stopped depository activity
• DE Shaw spokesperson confirms JV at an end
• States that DE Shaw's other Indian operations are still ongoing