AS PART of its transformation process, Reliance Capital will exit its lending businesses. Addressing the company’s AGM, Reliance Anil Dhirubhai Ambani Group Chairman Anil Ambani on Monday said: “As part of the transformation process, Reliance Capital will no longer be in the lending businesses.” “Both the lending businesses -- Reliance Commercial Finance and Reliance Home Finance -- between the two have an asset base of over Rs 25,000 crore.” According to Ambani, RCF and RHF are working closely with lenders to finalise the resolution plan which is expected to be completed in the next few months by December. “Reliance Capital will only be a financial shareholder in both these companies to reconverge shareholder value under a new management and shareholding structure and effectively reduce debt of Reliance Capital Group by Rs 25,000 crore.”
Besides, he pointed out that in the last six months the company has suffered collateral damage due to combination of factors “whether it was the crisis in the Financial Services sector, irrational action by Auditors and Rating Agencies, or now recognised temporary slowdown of the Indian economy. “These events aided and abated by reckless selling and rumour mongering by vested parties to affect the general public psychology especially shareowners like you.” However, the company’s retail shareholders increased by over 10 lakh in the last 6 months.
Reliance Capital shares tank 12.5 pc
Sept 30 (PTI)
SHARES of Reliance Capital on Monday came under massive selling pressure, plunging 12.5 per cent, after the company decided to shutter its two lending arms by December. The scrip plummeted 12.32 per cent to close at Rs 24.55 on the BSE. During the day, it dropped 13.57 per cent to Rs 24.20 -- its 52-week low. On the NSE, it plunged 12.52 per cent to close at Rs 24.45. Reliance Capital has two credit verticals -- Reliance Commercial Finance and Reliance Home Finance -- with a cumulative asset of over Rs 25,000 crore. Shares of Reliance Home Finance dropped 5 per cent to its lower circuit limit of Rs 3.81 on the BSE during the day. It settled 4.49 per cent lower at Rs 3.83. “As part of the business transformation, Reliance Capital has decided to exit the lending business. Both our lending businesses - Reliance Commercial Finance and Reliance Home Finance -- are working closely with all our lenders and other stakeholders to finalise the resolution plans which are expected to be completed by December,” Anil Ambani told shareholders at the AGM in Mumbai.
This is the second major business that the Anil Ambani-led group is exiting after its once flagship Reliance Communication was shuttered two years ago and is now under the bankruptcy process. Its defence business -- Reliance Naval -- is also under severe financial stress. Ambani blamed the crisis and the resultant decision to exit to the severe collateral damages the group had taken due to a combination of factors - crisis in the financial services sector, irrational action by auditors and rating agencies and now the slowdown of the economy. Other group shares also faced selling, with Reliance Infrastructure plunging 12.28 per cent, Reliance Power 8.71 per cent and Reliance Nippon Life Asset Management 2.13 per cent on the BSE.