Anil Ambani plans to become the next big deal maker. With India Inc making acquisitions worth at least a billion dollar every month, the Reliance ADAG Group is planning a foray into investment and merchant banking advisory services.
The company is planning to float a 100 per cent subsidiary under Reliance Capital, which is a depository participant of the two major depositories in the country and carries out retail broking under the name Reliance Money. It also funds projects and acts as a cash cow to other ADAG subsidiaries.
The group is in talks with a couple of foreign investment banks not having a presence in India, sources close to the development said. "The proposed entity would be a fully-owned subsidiary of Reliance Capital. RADAG is scouting for a foreign partner to form a joint venture," sources said.
Currently, Reliance Capital’s subsidiaries include Reliance Capital Asset Management Ltd, Reliance Capital Trustee Co Ltd, Reliance General Insurance Company Ltd and Reliance Life Insurance Company Ltd.
The total equity deals struck by India Inc in the last one-year period had crossed $50 billion, of which $46.8 billion was in 287 mergers and acquisitions and $5.1 billion was private equity investments, according to a Grant Thornton study.
Investment banking firms, which act as advisors, financiers and brokers to mergers and acquisitions deals, usually earn 5 to 10 per cent in commissions.
Recently, Reliance Capital started its retail broking venture under the name of Reliance Money, which is trying to establish itself as a one-stop shop for customers' financial needs.