The shareholders of Reliance Capital have approved the transfer of its commercial finance division - Reliance Commercial Finance (RCF) - into a separate wholly owned subsidiary (WoS). The transfer was approved by an overwhelming majority of 99.99% votes in favour of the Scheme of Arrangement at the court-convened general shareholders meeting held on September 10, 2016.
RCF is amongst the leading SME lenders in the Indian non-banking finance space with a focus on asset backed lending and productive asset creation. The Company has an aggregate asset under management (including securitized portfolio) portfolio of Rs 16,451 crore ($ 2.5 billion) as of June 30, 2016.
Reliance Nippon Life Insurance and Reliance Nippon Life Asset Management, both subsidiaries of Reliance Capital, already have a strategic partner – Nippon Life Insurance - with 49 per cent stake. The transfer will also enhance employee engagement and retention through ability to grant ESOPs in the business.
As per the Scheme, the commercial finance division of Reliance Capital was proposed to be merged into Reliance Gilts, a wholly owned subsidiary of Reliance Capital, and this merged entity was to be renamed as Reliance Commercial Finance. Reliance Gilts has now been renamed as Reliance Commercial Finance. The transfer, which has been approved by the shareholders, will be effective from April 1, 2016 and will now be filed for requisite court and necessary regulatory approvals.
