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After foraying into retail and sports management, Reliance Industries Ltd is now venturing into financial services.
On Sunday, RIL announced that it has agreed to establish a joint venture with New York-based D.E. Shaw group to build financial services business in India.
No details yet
RIL, however, has neither disclosed the structure nor the financial details of the joint venture.
The move by the petroleum and petrochemicals major to enter the financial services space comes in the backdrop of the scrapping of the non-compete agreement between Mukesh Ambani-led RIL and Anil Ambani's Reliance ADA Group last year and the RBI planning to issue new banking licence to private sector players, including non-banking finance companies and corporates. The ADA Group has significant presence in the financial services space through Reliance Capital.
According to a press release issued by RIL, the joint venture will incorporate the D.E. Shaw investment and technology expertise with RIL's operational knowledge and extensive presence across the country.
“The D.E. Shaw group is a natural partner for Reliance in the financial services domain. Together, we look forward to participating in the growing Indian financial services sector,” said Mr Mukesh Ambani, Chairman and Managing Director, RIL. “We believe this joint venture allows us to apply to the Indian markets our historical success in investment management and market-making, and that strengthening our presence in India and deepening our relationship with Reliance benefits our business globally,” said Mr Lou Salkind, a member of the D. E. Shaw group's Executive Committee.
“This joint venture will draw upon the core competencies of both firms to develop a platform that can serve the growing needs of Indian companies and individuals,” said Mr Anil Chawla, a Managing Director and head of the D. E. Shaw group's private equity activities in India.
D.E. Shaw group is an investment and technology development firm and has approximately $19 billion in investment capital as of January 1, 2011. It has offices in North America, Europe, West Asia, and Asia.
The firm established a presence in India in 1996 with focus on information technology.
Currently, the group's operations in the country span a wide range of investment activities, and the firm has over 700 employees in its Hyderabad, Gurgaon, and Mumbai offices.
On Friday, the Reliance Industries stock closed up 1.58 per cent at Rs 1,026.05 on the Bombay Stock Exchange.
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