Comments
Reliance Industries has disclosed investments in six major banks and a housing finance company amounting to Rs 1,233 crore in the last fiscal. This was highlighted in its recently released annual report 2011-2012.
The banking companies in which the energy major has acquired stake comprise three public banks and three private banks besides housing finance major HDFC Ltd. The public banks are PNB, SBI and Canara Bank while the private banks comprise ICICI, Axis and HDFC banks. The acquired shares in these seven financial sector giants account for minor stakes — ranging from 0.004—0.01 per cent. Reliance did not own any share in these companies in the last fiscal 2010-11.
The report also mentions that in financial year 2010-11, RIL and the D.E. Shaw group formed a joint venture to build a “leading financial services business in India.” “This joint venture is awaiting necessary regulatory approvals for the commencement of business activities,” added the report.
According to Senior Equity Analyst (Oil and Gas), Mr Yogesh Patil, KR Choksey Shares and Securities, the move signals a “win-win opportunity” for Reliance to gain foothold in the financial sector and indirectly help in expansion of its core business in oil gas and petrochemicals.
“These investments will be RIL's key to enter financial services using financial backing up from banks in all its new ventures in this sector. Also if RIL acquires more stake in any of the banks it can get an RIL board member to get a directorship position on the board of these banks or any of its subsidiaries.
“This would make it easy to finance their plans for existing business that comprises petrochemicals, oil and gas. This move is also beneficial to banks as they would get some much needed support with investments being pumped in from Reliance,” he added.
Meanwhile, according to the annual report, RIL's ‘current investments', which included mostly mutual funds, bank deposits, government securities and corporate bonds, rose from Rs 14,685 crore to Rs 27,173 crore. Investment in Certificate of Deposits with Scheduled Banks – Quoted alone tripled and rose from Rs 4,632 crore to Rs 15,720 crore
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.