Mumbai: Aiming for leadership position in the group's various financial businesses, industrialist Anil Ambani on Tuesday said Reliance Capital will pursue a banking foray and talks were in advanced stages for stake sale in asset management units to Japan's Nippon Life.

Addressing the shareholders at Reliance Capital's Annual General Meeting, Ambani said that the banking entity of the group could be called the Reliance Bank, subject to the regulatory approvals.

Making a slew of announcements, Ambani also disclosed that talks were in advanced stages for stake sale in Reliance Capital Asset Management and Mutual Fund businesses to Japan's Nippon Life, while potential investors have shown interest in acquiring stake in Reliance General Life also.

Ambani, as Chairman of the group's financial services arm Reliance Capital, also promised the shareholders that their demand for issuance of bonus shares and a special dividend would be taken to the board.

The announcements were greeted positively by the company's stock, which rose by more than 5 percent in late morning trade. After paring its initial gains, Reliance Cap settled 1.32 percent higher at Rs 394.50, after hitting an intra-day high of Rs 411.40.

Ambani said that Reliance Capital would look at unlocking value by divesting stakes across its businesses and will also explore opportunities to enter the high-growth banking sector.

"At an appropriate time when the RBI decides the actual process, we will pursue a banking licence," he said.

Ambani said, "We want to be among the top three in terms of market share, in terms of number of customers, in terms of profitability in whatever we do."

The company will be taking a conservative line in its debt profile, Ambani said, adding that the Rs 3,000 crore from Nippon expected in the next few weeks will be used to repay and reduce debt.

Speaking about the planned equity dilution in various businesses, Ambani said, "We are at an advanced stage of discussion with our new partner Nippon Life (which wants) to take an equity stake in Reliance Capital Asset Management and the Reliance Mutual Fund. We hope that over the next few months, we will have definitive news on that entire exercise."

Reliance Capital earlier this year agreed to sell 26 percent stake in life insurance venture Reliance Life for more than Rs 3,000 crore and subsequently signed a memorandum of understanding for exploring strategic alliance with the Japanese firm for other businesses as well.

Citing the divestment of 26 percent in Reliance Life, Ambani said, "This is an outstanding showcase of value creation and I am confident that we'll replicate that in each of our businesses as we move forward."

He said the company has recovered Rs 3,000 crore capital it had invested in the life insurance business by selling 26 percent to the Japanese company and still it would continue to hold 74 percent stake.

"We are likely to follow a similar model to Reliance Life to unlock value in Reliance General Insurance," he said, while adding that interests have been received for stake purchase in this unit as well.

At the AGM, shareholders also approved a proposal for sale of up to 25 percent stake in the company to institutional investors through qualified institutional placement.


(Agencies)