R-Capital to invest Rs 2k cr in insurance business

Reliance Capital (R-Capital), a part of the Group, is looking to invest Rs 2,000 crore in insurance businesses in the next three years, which would take the company’s cumulative investment in the sector to Rs 4,000 crore.

Addressing the shareholders at the company’s annual general meeting (AGM) here today, R-Capital Chairman Anil Ambani said, “We have drawn up some exciting growth plans for the next three years, which includes investing Rs 2,000 crore in the insurance business and increasing our distribution reach from 4,000 to 20,000 cities across the country.”

The company also aims to foray into the banking sector when the regulatory environment permits, he added. In addition to this, R-Capital is looking to start two separate non-banking financial companies (NBFCs) for housing and consumer finance, respectively.

On possible foreign acquisition in the midst of the global economic turmoil, he said, “We are examining the situation carefully, but our main focus would be on the domestic market.” However, Ambani said the impact on the overall Indian economy would be moderate owing to a calibrated, cautious and conservative approach of the country’s policy planners, coupled with strong domestic demand.

The gross domestic product growth at 8 per cent is a rarity as the current micro-economic climate has been characterised by rising domestic inflation, a weakening rupee, hardening interest rates, extreme volatility in capital markets and moderate-to-severe slowdown in leading global economies, Ambani added.

Referring to the collapse of Lehman Brothers and sale of Merrill Lynch, Ambani said, “The single biggest risk facing the global markets is the multi-dimensional credit crisis in the US, which has already caused major financial casualties, and severely impacted leading high-street names ranging from the investment to the banking fraternity. This has affected consumer spending and dampened confidence all around.”

Meanwhile, the firm’s plan to raise $1 billion through the private equity route by the third quarter is on schedule, an independent director of R-Capital said on the sidelines of the AGM.