Reliance Capital will apply for bank license and issue bonus shares

Stocks

oi-Shoaib

By Shoaib Md

Published: Tuesday, September 27, 2011, 16:08 [IST]

Anil Ambani, Chairman of the Reliance ADAG, said in the annual general meeting of Reliance Capital that the company will soon conclude its stake sale to Japan's Nippon Life Insurance.

He further added the company could consider a bonus issue and make an entry in the banking space.

"Banking is a new growth opportunity. We will evaluate opportunities to enter this high growth sector and are keeping track of all regulatory developments on this front," said Anil Ambani.

He also said that the request of shareholders for bonus issue will be sent to the company's board.

The money raised from this unlocking of value, estimated to be about Rs 3000, will be used to restructure the company's debt.

The chairman also said, Reliance Capital has also signed a pact with Nippon Life for collaboration opportunities in all Reliance Capital-promoted financial businesses.

"We are also pleased that the growth has been achieved in an entirely organic fashion. Our strategy is now to unlock value from all our major businesses for the benefit of our 1.3 million shareholders," said the Chairman.

VIEW: The announcements were investor friendly, but speculative investments should not be made based on these announcements. On bonus shares, the Chairman has only said that he will refer it to the board of directors. Banking license will depend on the prerogative of the Reserve Bank of India. And considering that one of the group companies, Reliance Communication, is under investigation the chances of RBI not grating the license exists.

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