Mumbai: Anil Ambani-controlled Reliance Capital Ltd on Friday said that the existing management team of its broking business - Reliance Securities group - has entered into a binding agreement for buying out the broking and distribution business from Reliance Capital, the company said in a stock exchange filing.
Reliance Securities is 100% subsidiary of Reliance Capital. The transaction is subject to regulatory and other customary approvals.
The Reliance Securities' business includes retail and institutional broking, third party distribution, proprietary trading and structured products.
“This management buyout transaction is part of our ongoing asset monetization plan and also reflects our stated intent to focus primarily on Life Insurance and General Insurance business as a way forward," said a Reliance Capital spokesperson.
The sale of Reliance Securities follows Reliance Capital’s stake in its asset management business - Reliance Nippon Life Asset Management Ltd (RNAM) - to its partner Nippon Life Insurance of Japan. The entire proceeds from the RNAM stake monetization, around ₹6,200 crore, will be utilised to reduce Reliance Capital’s outstanding debt obligations.
"Based on the above, and other asset monetisation deals presently underway, Reliance Capital expects to reduce its debt by at least ₹12,000 crore ($ 1.7 billion), or 70% in the current financial year," the company said while announcing sale of its RNAM stake.