Reliance Capital to list home finance business; eyes Rs 50,000 crore loan book

Mumbai: Betting big on housing finance space, financial services conglomerate Reliance Capital today decided to independently list its home finance venture in the stock market with a target to attain a loan book of over Rs 50,000 crore for this business in the next few years.

The financial services arm of Anil Ambani-led Reliance Group would retain 51 per cent stake in the separately listed venture while 49 percent equity in Reliance Home Finance will be alloted "free of cost" to nearly 1 million shareholders of Reliance Capital".

All shareholders of Reliance Capital will receive one free share of Reliance Home Finance Ltd for every one share held in Reliance Capital, the company said in a statement.

The proposal to independently list its home finance business'' Reliance Home Finance Ltd (RHF) - on the stock exchanges was approved by Reliance Capital's board at its meeting held here today.

"Reliance Capital will hold a 51 percent stake in Reliance Home Finance, and the company will be adequately capitalised to grow the lending book to over Rs 20,000 crore in the next 18 months," the company said.

The target is to further increase the book size to over Rs 50,000 crore over the next few years.

Commenting on the development, Reliance Capital's newly appointed Director Anmol Ambani said Prime Minister Narendra Modi has set a goal of affordable housing for all by 2022.

"There is presently an estimated shortage of 100 million residential units in India. To address the needs of this sector, Reliance Home Finance has charted an aggressive growth plan in this space, and aims to increase its book size to over Rs 50,000 crore in the next few years."

Anmol, elder son of Chairman Anil Ambani, further said, "The listing and allotment of shares in Reliance Home Finance, free of cost, will unlock significant value for our almost one million strong shareholder family."

The company said the listing of Reliance Home Finance will also lead to increased management focus and accelerated growth in the home finance business.

The proposal is subject to necessary shareholders and other approvals.

Market leader in housing finance, HDFC Ltd is also listed independently in stock market. It has a market cap of over Rs 2.2 lakh crore and loan book of over Rs 2.6 lakh crore.

Reliance Home Finance, currently a 100 per cent subsidiary of Reliance Capital, provides a wide range of loan solutions like home loan, loan against property, construction finance and affordable housing loans.

It reported an Asset Under Management of Rs 8,259 crore (USD 1.2 billion) during the quarter ended June 30, 2016.

It had an outstanding loan book of Rs 7,750 crore (USD 1.1 billion) and NPA ratio of 1 per cent for the quarter ended June 30, 2016. The loan book of the company is spread across 20,400 customers from the top 50 cities in India.

Parent firm Reliance Capital is present across various businesses including life and general insurance, asset management, mutual fund, consumer finance, broking, wealth management, distribution of financial products and asset reconstruction.