Reliance Capital gains after acquiring Goldman Sachs' India mutual fund business

Reliance Capital rose 1.94% to Rs 406.95 at 14:45 IST on BSE after Reliance Capital Asset Management, a part of the company, signed definitive agreements to acquire Goldman Sachs Asset Management's onshore business in India.

The announcement was made during market hours today, 21 October 2015.

Meanwhile, the BSE Sensex was down 21.27 points, or 0.08%, to 27,285.56.

On BSE, so far 6.76 lakh shares were traded in the counter, compared with an average volume of 5.56 lakh shares in the past one quarter.

The stock hit a high of Rs 416.80 and a low of Rs 398.25 so far during the day. The stock hit a 52-week high of Rs 550 on 4 December 2014. The stock hit a 52-week low of Rs 250.80 on 25 August 2015.

The stock had outperformed the market over the past one month till 20 October 2015, rising 15.84% compared with 4.15% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 1.72% as against Sensex's 3.92% decline.

The large-cap company has an equity capital of Rs 252.63 crore. Face value per share is Rs 10.

Reliance Capital Asset Management (RCAM) will pay a total sum of Rs 243 crore ($37.5 million) in cash to acquire all onshore mutual fund schemes, including exchange traded funds, of Goldman Sachs Asset Management (GSAM) India. The boards of both the companies - Reliance Capital Asset Management and Goldman Sachs Asset Management India - have already approved the transaction. The transaction is expected to be completed by the end of the year ending 31 March 2016 (FY 2016), subject to necessary regulatory approvals.

GSAM India currently manages 12 mutual fund schemes, including 10 ETF schemes, and is the largest ETF provider in India. It has a total asset under management (AUM) of Rs 7132 crore ($1.1 billion) as of 30 September 2015 which includes Rs 2172 crore ($334 million) of AUM in the Central Public Sector Enterprises (CPSE) ETF for which GSAM India is currently the exclusive fund manager.

As part of the transaction, RCAM will extend offers of employment to substantially all of GSAM India's employees dedicated to supporting the ETF business. GSAM India is a part of Goldman Sachs Asset Management, the asset management arm of the Investment Management Division of The Goldman Sachs Group, Inc. which oversees $1.19 trillion in assets under supervision as of 30 September 2015.

On a consolidated basis, Reliance Capital reported 22.6% rise in net profit to Rs 201 crore on 14.6% increase in total income to Rs 2457 crore in Q1 June 2015 over Q1 June 2014.

Reliance Capital, a part of the Reliance Group, is one of India's leading private sector financial services companies.

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