RCap's net profit up 28%

The financial services company said its shareholders had approved a preferential allotment of 2.8% stake to Sumitomo Mitsui Trust Bank for Rs 371 cr, in January

Reliance Capital (RCap) has posted a 28 per cent year-on-year growth in net profit to Rs 213 crore in the third quarter of FY15, on the back of robust growth in mutual funds and insurance businesses. Total income for the quarter ended December 2014 rose 11 per cent to Rs 2,105 crore.

"All our core areas of business did well, which include asset management, insurance and commercial finance," said Sam Ghosh, chief executive officer.

The financial services company said its shareholders had approved a preferential allotment of 2.8 per cent stake to Sumitomo Mitsui Trust Bank for Rs 371 crore, in January.

"We are awaiting approval from Competition Commission of India (CCI) and, hopefully, we should get that in the next couple of weeks; with that, Rs 371 crore will come in," said Ghosh.

The company's mutual fund arm, Reliance Capital Asset Management Company, saw its average assets under management (AUM) rise 23 per cent to Rs 1.26 lakh crore, while profit in this business rose 49 per cent to Rs 126 crore. "Our market share in terms of AUM in asset management is 11.4 per cent," Ghosh added.

Reliance Life Insurance's profit rose 45 per cent to Rs 40 crore, while that of Reliance General Insurance rose 37 per cent to Rs 15 crore. The life insurance new business premium rose to Rs 432 crore, up eight per cent.

The company said Nippon Life would acquire nine per cent stake in Reliance Capital Asset Management for Rs 657 crore and would raise its stake to 35 per cent. The transaction is expected to close by March 2015.

"The valuation of the asset management business based on this Rs 657 crore is Rs 7,300 crore. We'll get that amount, too, in the next couple of weeks because CCI approval has come through. We are waiting for one more approval," said Ghosh.

Reliance Commercial Finance's AUM recorded a growth of 13 per cent to Rs 18,500 crore, while profits were up six per cent to Rs 111 crore for the December 2014 quarter.

"The gross non-performing assets (NPAs) were 2.5 per cent in commercial finance business. Last year, at the end of the same quarter, it was 2.3 per cent. The commercial vehicles portion in NPA is slightly higher. But now, it has more or less peaked. The commercial vehicles portfolio is now around 12 per cent," Ghosh added.

Reliance Capital's broking business had revenues of Rs 50 crore for the quarter ended December 2014, recording a y-o-y growth of 92 per cent.

The distribution business of Reliance Capital - Reliance Money - generated revenues of Rs 23 crore for the December quarter. In wealth management, the AUMs as on December 31, 2014, increased to Rs 1,150 crore, recording a growth of 152 per cent.