Eyeing the high growth potential of housing finance business in line with the government’s aim to provide ‘housing for all’ by 2022, the board of directors of Reliance Capital, on Tuesday, approved a proposal to independently list its home finance business at the stock exchanges. The firm also set an ambitious growth target and aspires to increase its loan book from Rs 7,750 crore to Rs 20,000 crore in the next 18 months and then to Rs 50,000 crore over the next few years.
The company also announced that all shareholders of Reliance Capital will receive one share of Reliance Home Finance for each share held in Reliance Capital. While the financial services arm of Anil Ambani-led Reliance Group would retain 51 per cent stake in the separately listed venture, the remaining 49 per cent equity will be allotted to the 10 lakh shareholders of Reliance Capital.
“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,” said Anmol A. Ambani, director, Reliance Capital. He further added that the listing and allotment of shares to shareholders of Reliance Capital will unlock significant value for them. The proposal is subject to shareholders and other necessary approvals.
The company said the listing of Reliance Home Finance will also lead to increased management focus and accelerated growth in the home finance business. Currently, a 100 per cent subsidiary of Reliance Capital, the home finance company provides a wide range of loan solution. While it reported an asset under management of Rs 8,259 crore during the quarter ended June 30, 2016, it had an outstanding loan book of Rs 7,750 crore, spread across 20,400 customers in 50 cities.