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Leading private sector financial services company, Reliance Capital posted a 28% growth in year-on-year net profit at Rs 213 crore in the third quarter ended December 31, 2014 on robust growth in mutual funds and insurance businesses. The total income for the quarter ended December 2014 rose 11% to Rs 2,105 crore.
"All our core areas of business did well which includes asset management, insurance and commercial finance," said Sam Ghosh, CEO of Reliance Capital.
The company said the shareholders have approved preferential allotment of 2.8% stake in Reliance Capital to Sumitomo Mitsui Trust Bank for Rs 371 crore in January 2015. "We are awaiting approval from Competition Commission of India (CCI) and hopefully in the next couple of weeks we should get that and with that Rs 371crore will come in," said Ghosh.
The company's mutual fund arm Reliance Capital Asset Management Company saw its average Assets Under Management (AUM) rise 23% to Rs 1.26 lakh crore, while profit in this business rose 49% to Rs 126 crore. "Our market share in terms of AUM in asset management is 11.4%," said Ghosh.
Reliance Life Insurance's profit rose 45% to Rs 40 crore, while that of Reliance General Insurance rose 37% to Rs 15 crore. The life insurance new business premium rose to Rs 432 crore, up 8%.
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The company said that Nippon Life is expected to acquire 9% stake in Reliance Capital Asset Management for Rs 657 crore and would raise its stake to 35%. The transaction is expected to close by March, 2015.
"The valuation of the asset management business based on this Rs 657 crore is Rs 7,300 crore. That amount too we will get in the next couple of weeks because CCI approval has come through. We are waiting for one more approval," said Ghosh.
The assets under management of Reliance Commercial Finance business recorded a growth of 13% to Rs 18,500 crore while profits were up 6% to Rs 111 crore as on quarter ending December 31, 2014.
"The gross non-performing assets (NPAs) were 2.5% in commercial finance business. Last year at the end of the same quarter it was 2.3%. The commercial vehicles portion in NPA is slightly higher. But now it has more or less peaked. The commercial vehicles portfolio is now around 12%," Ghosh said.
Reliance Capital's broking business had revenues of Rs 50 crore for the quarter ended December 2014, recording a year-on-year growth of 92%.
The distribution business of Reliance Capital, branded as "Reliance Money", generated revenues of Rs 23 crore for the December quarter. In wealth management, the AUMs as on December 31, 2014, increased to over Rs 1,150 crore recording a growth of 152%.
