Reliance Capital to monetise non-core investments by March 2018

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KOLKATA: Anil Ambani-led Reliance Capital said the process of monetising its non-core investments will be completed by March 2018 and the management is now committed to zoom in its focus on the key financial services verticals.

“All non-core investments will be monetised by March 2018 leading to large capital gains,” Chairman Ambani said in an analysts meet held late Thursday. He added that housing loan, loans to small and medium enterprises and consumer finance will be the new growth engines.

The company with Rs 15,390 crore net worth has been in the process of unlocking value from several non-core investments in movie exhibition, film and media and radio and TV for quite some time.

It also has investments in Yatra Online, Sula Vineyards, Grover Vineyards and Mahindra First Choice outside financial services space.

The company shares closed 0.35% down Friday at Rs 601.40 on BSE.

It had earlier in the month sold its stake in One97 Communications — the parent company of digital payments provider Paytm — to China’s Alibaba in a deal estimated at Rs 275 crore which is 27 times of its investments.

The financial services firm has total assets of Rs 67,112 crore as on March 31, 2016. The company’s core business interests include asset management, insurance, commercial finance, broking & distribution and asset reconstruction.

“What we have picked up from the analyst meet yesterday was the management’s commitment towards trying to focus on the key businesses and trying to play a roadmap towards deleveraging the non-core assets that they have kind of carried on their balance sheet,” Nilesh Parikh, associate director for wholesale capital markets at Edelweiss Financial Services told ET Now in an interview.

“This clearly brings the focus back to the core businesses that they carry. Over the last six to eight month they have worked around and got the right people to run the key businesses,” Parikh said.

Reliance Capital said in its presentation to analysts that it has over 2 crore customers and Rs 4 lakh crore in asset under management.

It Thursday announced a plan to hive off health insurance from its general insurance subsidiary and sell a part of the stake to overseas equity partners.

“The focus on health insurance is due to favourable demography and government initiatives,” Ambani said, adding that the company would explore value creating consolidation opportunities across all businesses.