Mumbai (Maharashtra) [India], Sep 30 (ANI): Reliance Anil Dhirubhai Ambani Group (ADAG) Chairman Anil Ambani said on Monday that Reliance Capital will no longer be in any lending business.
Instead, it will be only a financial shareholder in subsidiary companies Reliance Home Finance and Reliance Commercial Finance.
"As a part of transformation process, Reliance Capital has decided it will not be in any of the lending businesses," Ambani told shareholders at the company's annual general meeting.
"Reliance Commercial Finance and Reliance Home Finance are working closely with all our lenders and other stakeholders to finalise the resolution plans which are expected to be completed in the next few months by December 2019," he added.
Ambani said that Reliance Capital will only be a financial shareholder in both these companies to reconverge shareholder value under a new management and shareholding structure and effectively reduce debt of the group by Rs 25,000 crore.
He said the company suffered great collateral damage over the last six months due to a combination of factors, including the crisis in the financial services sector, irrational action by auditors and rating agencies, and now slowdown of the Indian economy.
"Non-banking financial companies (NBFCs) suffered collateral damage due to a combination of factors, including reckless selling and rumour mongering over the past six months," he said.
Retail shareholders of the company have increased by 10 lakh, he said, adding that it is unfortunate that true value of the business is not recognised amid all the noises.
Ambani said the ADAG had repaid over Rs 35,000 crore in debt over the past 15 months. It is close to repaying another Rs 15,000 crore by March 2020 despite zero funding from any bank, NBFC or financial institution.
Reliance ADAG Group has over Rs 60,000 crore receivables stuck in regulatory and arbitration proceedings for the past five to ten years. "We are transforming Reliance Capital. It is a young company."
On Monday, Reliance Capital said it recently made interest and principal repayment of Rs 72.65 crore on a range of instruments, including non-convertible debentures, term loans and inter-corporate deposits.
It said the company remained current on all its repayment obligations. The company completed 21.54 per cent stake sale in Reliance Nippon Life Asset Management to Nippon Life Insurance of Japan for Rs 3,030 crore, it said on Friday.
Following the development, the scrip fell 12.14 per cent to hit a low of Rs 24.60.
Reliance Capital is one of India's largest financial services conglomerates in the country with nearly Rs 90,000 crore of assets, Rs 8,000 crore of net worth and over 18,000 employees.
It has a strong presence across the entire financial services space, including general insurance business, life insurance business, asset reconstruction, securities broking and distribution and commodity exchange businesses. (ANI)