RIL enters financial services with DE Shaw
Reliance Industries today announced that it has entered into a joint venture with the New York-based DE Shaw group, to make its first step in the financial services sector. HT reports.business Updated: Mar 28, 2011 01:34 IST
Reliance Industries on Sunday announced that it has entered into a joint venture with the New York-based DE Shaw group, to make its first step in the financial services sector."This joint venture will incorporate the DE Shaw group’s investment and technology expertise with Reliance’s operational knowledge and extensivepresence across India to offer a comprehensive array of financial services," the company said in a statement released on Sunday.
“The company is expected to come out with a detailed rollout of financial products and services over the next couple of months,” said a source close to the development, who did not wish to be identified.
Experts say this move is not likely to have an immediate positive impact on Reliance industries, as the company will have to make investments in the financial services sector.
“It establishes the fact that they are serious on this business and raises the speculation that Reliance may acquire JM Financial and IL & FS,” said SP Tulsian, an independent market expert. “I think it will have to be complemented with banking and consumer finance business over a couple of years.”
Mukesh Ambani-led RIL had a few months ago annulled the earlier non-compete agreement with ADA Group of Anil Ambani. Since then, RIL has taken steps to enter the telecom and the power business too — areas in which ADAG is present.
“Reliance is delighted to partner with the DE Shaw Group in financial services,” Mukesh Ambani said in a statement. “We look forward to participating in the growing Indian financial services sector.”
Global investment and technology development firm DE Shaw Group has been operational in India for over a decade now.
“We believe that strengthening our presence in India and deepening our relationship with Reliance benefits our business globally,” said Lou Salkind, member of the DE Shaw Group’s executive committee.
“This joint venture will draw upon the core competencies of both firms to develop a platform that can serve the growing needs of Indian companies and individuals,” said Anil Chawla, the managing director and head of DE Shaw Group’s private equity activities in India.