News: Anil Ambani to re-enter R&T business

(DNA 11/10/2006) mumbai - More than a decade after Reliance Industries vacated the share registry and transfer business, Reliance ADAG is set to re-enter the sector under the aegis of its flagship company- Reliance Capital.

The new foray could be seen as a bid to capture all streams of revenues flowing from the broking business.

Even as R Trade, Anil-Ambani-controlled Reliance Capital’s mega-foray into stock broking is slated for a launch, industry circles reveal that the group is preparing for an entry into the share registry and transfer (R&T) agents business.

It has been reliably learnt that Reliance Capital has hired consultants Ma Foi and Team Lease, among others, to help recruit staff for its R&T business.

“We do not comment on speculation,” is all that was gleaned from a Reliance Capital spokesperson.

Since Reliance Consultancy Services (the R&T arm of the erstwhile Reliance group) wound up operations, Karvy has been acting as R&T agents to all the Reliance companies, including those that come under the Reliance ADAG banner.

The incumbents, Karvy, Intime Spectrum (the latter recently took over the R&T business of MCS, though only around 150 of MCS’ 350 clients have moved to Intime till date) and others, may have to watch out, but it is still unclear as to whether Reliance Capital’s foray into this business would only be to act as registrar for its own asset management arm, Reliance Mutual’s schemes, or would entail a concerted effort to become a full-fledged corporate registry that will include its group companies.

If it’s the latter, it may spell trouble for Karvy since it is the R&T agent for all the listed companies of the Reliance ADAG group. These include Reliance Capital itself, Reliance Communications, Reliance Energy and Reliance Natural Resources. The Reliance ADAG companies boast of a shareholder base of over 20 million shareholders.

The new development comes at a time when the R&T industry is consolidating. Last year, the Tatas decided to move away from R&T business by selling a part of its stake to Darashaw & Company.

“It will be good for the industry if the new entrant, whoever it might be, sets new benchmarks and improves service standards. But since it is a service-oriented industry, existing players are not performing badly, and will give the new player a run for its money,” said Ramnarayan MV, director of Intime Spectrum.

Reliance Capital is registered as a depository participant with National Securities Depository Ltd (NSDL) and Central Depository Services Ltd (CDSL). It has also sponsored Reliance Mutual Fund, and operates in the insurance space through Reliance General Insurance Company and Reliance Life Insurance Company.