'Reliance Bank' to be listed after three years: Anil Ambani

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Mumbai: Hopeful of getting a banking licence for 'Reliance Bank', industrialist Anil Ambani today said this proposed venture will help lower Reliance Capital's debt to one-fourth of current levels and would be listed as a separate entity with an IPO after three years.
Addressing shareholders of Reliance Capital, the group's financial services arm, Ambani also exuded cofidence in the long-term growth potential of the proposed bank as a "profitable institution in itself".
"We are in constant touch with the regulator (RBI) to ensure that all queries are answered (with regard to our application for a banking licence). We are hopeful that we will be among the first few recipients of the banking license," the Reliance Capital Chairman said.
Replying to queries about possible listing of various subsidiaries of Reliance Capital, Ambani said that the parent company would remain a listed entity and there was no proposal to list any other entity except for the proposed bank.
"As and when we get the licence and when the three-year period lapses, at that stage, as per the regulations there will be an IPO and we will list Reliance Bank," he said.
The licences are expected to be finalised in 2014. Ambani said that immediate benefit of the banking foray would be a reduction in Reliance Capital's consolidated debt from Rs 20,000 crore to Rs 5,000 crore, due to transfer of its Commercial Finance business to the proposed bank.
The company, which is already present in a host of financial services businesses like insurance, mutual funds and brokerage, submitted an application for banking licence in June to the Reserve Bank of India (RBI). R-Cap is one of the 26 entities that have applied for banking licence.
Ambani said that the banking foray would also help improve R-Cap's debt-equity ratio to "a most conservative level of 0.5-1, which is far lower than industry standards".
Emphasising that the company was adequately capitalised, Ambani said there were no plans to ask R-Cap shareholders for providing initial capital for the bank.
"We presently have no plans to make a capital call, or ask you for money to invest in the bank, as your company is adequately capitalised.
"However, at the end of three years, we intend to list the proposed bank, as per existing guidelines, and you may be assured we will fully explore all avenues to benefit our over 12 lakh shareholders at that time," Ambani said.
R-Cap plans to focus on five major businesses - life insurance, general insurance, health insurance, asset management and banking - for future growth, he added.