The home-grown financial firms are increasingly looking at going global. Close on the heels of Religare Enterprises acquiring London’s oldest brokerage house Hichens Harrison in a $110 million deal early this year, now Reliance Money, the retail broking arm of Reliance Capital, is starting a fresh venture in Saudi Arabia to be called Riyada Reliance Money.
The firm is beleived to be talking to a few Middle-Eastern investors who will together pick 74 per cent in the company with an infusion of 200 million Saudi Riyal (around $55 million or Rs 230 crore) in Riyada Reliance Money. Among those who are likely to form part of the group of investors include a few sovereign wealth funds besides other institutions in the region.
Reliance Money will therefore put in around Rs 80 crore for its 26 per cent stake and would retain management control in the firm and will be the single largest shareholder.
Interestingly Riyada Reliance Money will be involved in investment banking, besides various other activities such as brokerage, depository services, investment advisory and asset management. Interestingly, Reliance Capital is launching a global investment banking outfit out of India called Reliance Equity International for which it has hired Keshav Sanghi from Deutsche Bank.
The prime reason why Reliance Money is expanding into Saudi Arabia is the large chunk of NRI population which is estimated to be more than 20 lakh. Besides, Saudi Arabia is among the bigger financial markets in the region and had last year disallowed banks to offer brokerage services. This has opened up opportunity for new players to enter the market which is currently catered by standalone local brokers.
An entry into Saudi Arabia would help expand Reliance Money’s reach in the Middle East region where it already has a presence through offices in UAE and Oman but these are smaller ventures. Reliance Money had in the month of May announced its foray into the Chinese market by launching its business in Hong Kong.