Mumbai: Reliance Money Ltd, an arm of the listed Reliance Capital Ltd, the financial services subsidiary of the Reliance-Anil Dhirubhai Ambani Group, has aggressive plans to expand its over-the-counter business through both organic and inorganic expansions.
Currently, this business vertical, which comprises operations such as money change, money transfer and selling gold coins, accounts for ?about 10% of the company’s revenue.
“We are actively looking for an acquisition opportunity in the money-transfer business in India,” said Sudip Bandyopadhyay, chief executive of Reliance Money. It had earlier acquired TravelMate, the money changing business of Kuoni Travel Group. “We also plan to become one of the largest vendors of gold coins in the country,” he said. The company plans to sell low-cost variants of gold coins through its retail units and through the Reliance World outlets, owned by its parent group, across India.
About 10% of the total gold consumed in India is in the form of coins, Bandyopadhyay added. “However, only 5% of this market is under organized players,” he said.
Large private sector banks, such as ICICI Bank Ltd and HDFC Bank Ltd, and the Tata group’s jewellery chain, Tanishq, are among the biggest domestic vendors of gold coins. The firm has stuck an exclusive deal to source gold coins from Switzerland-based Valcambi SA—one of the world’s largest gold refiner, earlier owned by financial major Credit Suisse Group.
ICICI Bank sources gold from Pamp SA, another Swiss refiner.
Reliance Money will expand its retail network from the current 3,237 outlets to more than 10,000 by the end of this financial year to reach 5,645 tehsils in India, said Bandyopadhyay. It also plans to increase the number of its trading kiosks, manufactured by Germany’s Wincor Nixdorf, from 2,500 to 10,000 by March 2008.
In a move to lure investors beyond its retail units, the company has tied up with the Indian Institute of Technology, Bombay-incubated start-up Webaroo Inc. to launch a financial market information portal on the mobile platform. The free service will give users access to market information, stock quotes and research reports. While sister concern, listed Reliance Communications Ltd is a large telecom service provider, Reliance Money has made the mobile application available across operators, in a bid to tap the expanding mobile subscriber base, which already is touching 200 million in the country. Making financial data freely available to a large user base will increase the number of financial transactions in the long run, Reliance Money said.
The company is also keen on enabling financial transactions on the mobile platform, but cannot do so at the moment because of regulatory issues. “We’d like our customers to be able to transact on the portal, but the Securities and Exchange Board of India is not favourable towards capital market transactions on mobile handsets due to security issues,” said Bandopadhyay. The firm has already incorporated features such as security tokens to ensure consumer security is not breached, he added.
It currently allows financial transactions through retail outlets and online platform. More than 50% of the company’s revenue comes from its financial markets vertical.