Reliance Capital Chairman Anil Ambani announced a special dividend for shareholders, and said the company is in talks to sell a 26 percent stake to strategic partners in its general insurance business.
The special dividend, to be considered by the company’s Board on September 10, is being given for completion of 25 years of his group’s financial services arm Reliance Capital.
Addressing the shareholders at RCap’s Annual General Meeting (AGM) here, Ambani also said the company’s life insurance unit will partner with banks for distribution of products, while discussions are underway for Reliance Mutual Funds managing the funds of Japan’s Nippon Life.
Nippon Life, which has assets of over Rs 30 lakh crore globally and is a strategic partner in Reliance Life and Reliance Asset Management Company, will also help distribute Reliance MF products in Japan.
The Japanese financial services giant has acquired 26 per cent stake in Reliance Life for over Rs 3,000 crore in the largest FDI deal in the Indian financial services space.
About the IPO of Reliance Life, Ambani said it would take place “at an appropriate time”.
Nippon Life has also bought 26 percent stake in Reliance Capital Asset Management for 1,450 crore in the largest investment in the Indian AMC sector till date.
Ambani said RCap’s total income rose 21 percent to Rs 6,627 crore last fiscal, while net profit rose 57 percent to Rs 458 crore.
Its total assets rose 10 percent to Rs 35,343 crore, while networth grew by 50 percent to Rs 11,697 crore in 2011-12.
Besides financial services, Ambani-led Reliance group is present in businesses like telecom, power, infrastructure, media and entertainment.
In his speech, Ambani said in the last one year, the Reliance Capital has attracted equity investment of nearly Rs 5,000 crore by Nippon Life.
He termed the investments by Nippon “special” as it has been achieved in the backdrop of unprecedented global uncertainty, and challenging conditions in the domestic economy.
“It is a tribute to the faith that sophisticated institutions from the international community have in India and its growth potential, despite all the scepticism we see all around us,” Ambani said.
“These investments of course also speak volumes about the trust and faith imposed by international investors in your company and our Group,” he added.
He added that Nippon Life has given a combined valuation to Life and AMC businesses at over Rs 17,000 crore, which is more than two times of the company’s current market capitalisation.
On the life insurance business, Ambani said in short span of five years the company has become one of the leading players in the highly competitive private sector space, which has over 20 players today.
He also claimed that the group’s life insurance business sold the highest number of policies in the country in FY12.
About the asset management operations, he said in the past six years of the existence from 2005, this business alone has delivered cumulative net profits of nearly Rs 1,500 crore.
PTI