India's Reliance Capital to exit lending business, shares hit 2-decade low

Nippon Life India Asset Management

30/09/2019 07:15

MUMBAI, Sept 30 (Reuters) - Indian financial services
company Reliance Capital Ltd  RLCP.NS  will exit the lending
business, group Chairman Anil Ambani said on Monday, sending its
shares to over two-decade low.
    This comes as the non-banking financial company faced
"collateral damage" due to a slowing economy and a lending
crisis in the sector, Ambani said at the company's annual
general meeting.
    In June, auditors raised several red flags around the
company's fourth-quarter results, including a lack of clarity in
related party transactions and accounting methodology.
 urn:newsml:reuters.com:*:nL4N23O22N    
    Reliance Capital currently lends to small and medium
enterprises through unit Reliance Money and to home buyers via
Reliance home finance. Both these businesses accounted for about
15% of the company's revenue last financial year.
    Apart from lending, Reliance Capital has interests in asset
management and general insurance businesses.
    The company has been divesting assets this year. It reduced 
its stake in asset management arm Reliance Nippon Life Asset
Management Ltd  RELL.NS  to just over 4% from about a quarter.
 urn:newsml:reuters.com:*:nFWN26K03T
    "It is unfortunate that during all this noise, the true
value of our businesses has not been recognised," Ambani said.
    Shares of Reliance Capital, which have lost about 99% of
their value since hitting an all-time high in January 2008, 
slumped as much as 13.6% on Monday to their lowest since March
30, 1999 and were last down 9.5%.

 (Reporting by Nupur Anand in Mumbai; Writing by Derek Francis;
Editing by Subhranshu Sahu)
 ((derek.francis@thomsonreuters.com; +91-9986311363; Tweet to
@derekfrancis089 LinkedIn: https://www.linkedin.com/in/derek-francis/;))