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Reliance Capital gets bourses’ approval for home finance arm’s demerger
Photo Credit: Shah Junaid/VCCircle

Anil Ambani-led Reliance Capital Ltd has received approval from BSE and NSE for a demerger of Reliance Home Finance, a move that will facilitate an independent listing of the home finance unit.

Reliance Home Finance is on track to be independently listed on stock exchanges within a few months, the company said in a statement.

The firm will file a scheme of demerger with the National Company Law Tribunal, seeking the tribunal’s approval, it said.

As part of the demerger, nearly one million shareholders of Reliance Capital will be allotted one share in Reliance Home Finance for every one share held in Reliance Capital.

Reliance Home Finance offers home loan, loan against property and construction finance.

In September last year, the company said it will go for a separate listing. The firm also said it plans to grow the mortgage lender’s book size to Rs 20,000 crore in 18 months and to Rs 50,000 crore in a few years.

In FY2016-17, its assets under management (AUM) rose 87% to Rs 11,174 crore (around $1.7 billion) while disbursements increased 87% to Rs 7,333 crore. Disbursements included Rs 1,102 crore distributed towards affordable housing with an average ticket size of Rs 11 lakh.

The home finance company reported a total income of Rs 1,145 crore, a year-on-year increase 40%. Its profit after tax nearly doubled from Rs 87 crore to Rs 173 crore and return on equity (RoE) improved from 16.5% to Rs 17.7%.

Reliance Capital's other businesses include asset management, mutual funds, life and general insurance, stockbroking, wealth management, distribution of financial products and asset reconstruction.

In March 2017, Soumen (Sam) Ghosh, executive director and group chief executive officer of Reliance Capital Ltd, quit the firm.

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