As per reports, financial giants including Schroders, Blackstone and US-based Capital, have submitted offers to Reliance Capital for buying a small stake in its mutual fund business, Reliance Capital Asset Management.
Reports further add Reliance Capital was expecting a valuation of $1.2 billion for the asset management business, which is 10% of its assets under management.
Reliance Mutual Fund is the only large mutual fund owned completely by Indians. Its AUM size three years ago was a mere Rs 9000 crore. A determined drive to expand distribution and launch of several new schemes, helped by an expanding market, has seen it transform into the country’s largest player.
India's mutual fund industry, whose assets grew 36% to Rs 3.5 trillion between May 2006 and April 2007, has been attracting many global players.
Reliance Capital had reported 20% rise in net profit for the full-year ended March 2007 to Rs 646 crore on the back of robust growth in its insurance and mutual fund businesses. Reliance Capital's total revenue rose 36% to Rs 884 crore in the year ended March 2007, from Rs 652 crore in the previous fiscal.
On a consolidated basis, Reliance Capital's net profit rose 23% to Rs 703 crore and total income more-than-doubled to Rs 2158 crore during the fiscal, a 128% increase from Rs 947 crore of the previous year.
Reliance Capital said in a statement that its total assets stood at Rs 6769 crore, while its net worth rose to Rs 5262 crore as on March 2007, against Rs 4122 crore a year ago. Its investment portfolio, up to March 2007, amounted to Rs 2434 crore. The company had no non-performing assets.
Among group companies, Reliance Asset Management recorded a net profit of Rs 49 crore, a 63% increase during the year. The number of investors in Reliance Mutual Fund (RMF) increased to 32.27 lakh from 20.95 lakh a year ago, Reliance Capital added.
The assets under management of RMF increased 88% to Rs 46,307 crore at the end of the fiscal from Rs 24,670 crore a year ago, making it the country's largest fund-house.
Besides, the premium income for Reliance Life Insurance unit in the year jumped 348% in the fiscal to Rs 1005 crore from Rs 224 crore in the previous year.
Reliance Capital expanded its distribution network to 217 branches from 153 branches at the end of the previous fiscal, while also having approval from Insurance Regulatory and Development Authority (IRDA) to start additional 130 branches.
For Reliance General Insurance, the gross direct premium for the year rose to Rs 912 crore from Rs 163 crore in the previous year, representing an increase of 462%.
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