Anil Ambani wants to enter banking business

Anil Ambani wants to enter banking business
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First Published: Tue, Sep 16 2008. 10 03 PM IST

Expansion mode: Anil Ambani, chairman of Reliance Infrastructure, says the company will bid for contracts for atomic power stations. PTI
Expansion mode: Anil Ambani, chairman of Reliance Infrastructure, says the company will bid for contracts for atomic power stations. PTI
Updated: Tue, Sep 16 2008. 10 03 PM IST
Mumbai: Reliance-Anil Dhirubhai Ambani Group, or R-Adag, plans to enter the banking sector when the industry opens up and infuse Rs2,000 crore in its two insurance arms, besides venturing into asset reconstruction, institutional broking and private equity, chairman Anil Ambani said on Tuesday.
Expansion mode: Anil Ambani, chairman of Reliance Infrastructure, says the company will bid for contracts for atomic power stations. PTI
Potential opportunities in the construction of atomic energy stations, steel, shipping and cement are also on the group’s radar, said Ambani, who addressed shareholders of his infrastructure and financial services companies at two separate annual general meetings.
R-Adag’s businesses include telecommunications, financial services, power and utilities and entertainment.
Charting the future plans of Reliance Capital Ltd before its shareholders, Ambani said the company will enter the banking sector, “as and when the regulatory environment permits”. Under the current law, industrial houses are not allowed to start a bank in India.
In the next three-five years, the company will aim at more than tripling its customer base to 50 million, increasing the distribution reach from 4,000 locations to 20,000 locations and doubling the cumulative investment in its two insurance firms—Reliance Life Insurance Co. Ltd and Reliance General Insurance Co. Ltd—to Rs4,000 crore.
The conglomerate will also set up a separate housing finance subsidiary and a non-banking finance unit.
“We have already filed applications with the regulators concerned in this respect and are awaiting their approval,” said Ambani who is also planning to start a ‘Reliance Capital University’ to train financial services professionals.
The group has also identified opportunities for cross-selling Reliance Capital products to other R-Adag customers—such as offering life insurance to energy customers and marketing Reliance mutual fund plans to telecom subscribers. A new company called Reliance Capital Services was set up in July for cross-selling financial services to shareholders, customers and other stakeholders.
Reliance Infrastructure Ltd, India’s third largest utility company, plans to bid for engineering and construction contracts for atomic power stations, he told shareholders.
The Mumbai-based company will also explore setting up equipment manufacturing facilities for power generation in India, West Asia, Africa and Southeast Asia.
The group is pursuing opportunities in steel, shipping and cement but that will be independent of Reliance Infrastructure, said Ambani, who plans to invest Rs40,000 crore to set up a steel factory in Jharkhand.
Ambani also referred to the US credit crisis that has felled financial powerhouse Lehman Brothers Holdings Inc. and forced Merrill Lynch and Co. Inc. to sell itself to Bank of America Corp.
“The single biggest risk facing the global markets is the multi-dimensional credit crisis in the US, which has already caused major financial casualties,” Ambani said.
He quickly added that the impact on India was likely to be “far more moderate” because of the “calibrated, cautious and conservative approach of our policy planners”.
Reliance Capital shares rose 2.35% to close at Rs1,107.45 and Reliance Infrastructure gained 0.59% to Rs843.90 on Tuesday, even as the bellwether Sensex index edged down 0.09%.
Debarati Roy and Archana Chaudhary of Bloomberg contributed to this story.
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First Published: Tue, Sep 16 2008. 10 03 PM IST
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