Reliance Cap to venture into investment banking

Anil Ambani group firm Reliance Capital today said it plans to enter investment banking space by the end of the current fiscal.

"This is a missing link in the our business. We are aiming to set up the investment banking venture by the end of March 2010," Reliance Capital CEO Sam Ghosh said.

Reliance Capital has already secured merchant banking licence from the market regulator Sebi, he said, adding, the company would soon start the process of hiring top management for the business.

When asked about the activity that the proposed venture would undertake, Ghosh said, "We can look at various things like advisory in merger and acquisitions, equity and debt, but we have not firmed up any plans on that yet."

Addressing shareholders ADA Group Chairman Anil Ambani had said, "Given the scale and magnitude of our relationships across corporate India and the sheer size and reach of our distribution network, we are ideally positioned to create a significant presence in this business."

Besides, the company is focusing on high net-worth individuals and financial institutions for raising funds for its private equity business, which would look at buyouts and acquisition financing among others.

About the life insurance venture, Ghosh said the assets under management (AUM) has crossed Rs 10,000-crore mark in September 2009 and is aiming for a four-fold rise in AUM in the next four years.

The AUM has grown from Rs 3,000 crore in September 2005 to Rs 10,000 crore, registering a compounded annual growth rate of 240 per cent in the last four years, making it the sixth largest private life insurer in the country, he said.

The company is aiming to position itself among the top- three in the next four years. The private insurer is targeting an AUM of Rs 30,000 crore by 2012 and further to Rs 40,000 crore by 2013.

Of the total assets of Rs 10,000 crore currently, Reliance Life has parked Rs 6,000 crore in the capital market, while the remaining Rs 4,000 crore in debt instruments.

The private player collected Rs 211.69 crore during the month of August.

During the first five months of the current fiscal, the first premium income of the company declined by 15 per cent to Rs 947.41 crore against Rs 1,112.61 crore in the same period last year.