New York: The finance arm of the Reliance-Anil Dhirubhai Ambani Group (R-Adag), Reliance Capital Ltd, aims to be one of the top companies in each of its businesses—life insurance, mutual funds, stock broking—chief executive officer and managing director Sam Ghosh said in an interview. Edited excerpts:
Where do you see growth coming from? What’s the kind of strategy that you are adopting now at Reliance Capital with your various businesses?
For us, the focus is on all businesses that are capital market-related as well as financial services sector. We are not focusing on (any) one of our businesses; we want all our businesses to make money. We want the asset management business to continue amongst the top players as well as achieve good profitability. We expect our life insurance business also to be in the Top 3 at least, and try and come to break-even as soon as possible. (The) same goes with our broking business, we want it to become more profitable and gain market share as well as consumer finance, where the focus is profitability...
Looking ahead: Reliance Capital chief executive Sam Ghosh.
Can you specifically give us some details on how the life insurance business has performed of late and what kind of market share you have been able to garner?
In terms of growth rate, we have been growing quite well in terms of annualized premium equivalent. Otherwise, the new business premium growth rate has been flat. But as compared to the overall private sector industry, which has a negative growth rate, our life insurance company has performed really well... We were No. 1 in Q1 (first quarter) in terms of private sector in terms of policies sold. That shows that at least our reach is correct and we are targeting a customer base that’s still willing to buy life insurance policies.
The concern with a lot of non-banking financial companies like yours is about the asset quality. Do you have any concerns that asset quality will worsen for you or non-performing assets will go up?
Our focus on asset quality started taking place since the day we started. We never thought of being No. 1 in the consumer finance space and after October, we stopped looking at unsecured business totally. So our focus is now only on secured business and in terms of non-performing asset levels, they have now flattened out and we expect that they started improving gradually. So in the next two-three months, they will start improving.
There has been talk that at some point — you have told us in the past too — that you may look for an IPO (initial public offering) or some kind of a stake sale or even a combination of both (for your insurance business). Any clarity on that on what kind of timelines you are looking at for the capital-raising plan at Reliance Capital?
We will actually find out from the regulatory perspective what can be done and then we will decide what options are available to us. As and when that happens, we will look at dilution, may look at up to 20% dilution.