Reliance Capital on Tuesday informed the stock exchanges that the company's board of directors had approved a proposal to independently list its home finance business -- Reliance Home Finance (RHF)— on the stock exchanges.
Following the announcement, the Reliance Capital stock was trading at Rs. 552.30 at around 10:52 a.m. on Wednesday, up 3.71 percent from its previous close on the Bombay Stock Exchange. The scrip opened at Rs. 552.50 and touched a high and low of Rs. 558.40 and Rs. 546.65, respectively.
In the BSE filing, the company said the independent listing of Reliance Home Finance is expected to unlock a substantial value for the existing shareholders of Reliance Capital. It would also lead to increased management focus and accelerated growth in the home finance business.
According to the proposal, 49 percent stake in Reliance Home Finance Limited will be allocated to all the shareholders of Reliance Capital in the ratio of one share free of cost in Reliance Home Finance Limited for every share held in Reliance Capital. Reliance Capital will hold a 51 percent stake in Reliance Home Finance, and the company will be adequately capitalised to grow the lending book to over Rs. 20,000 crore in the next 18 months.
"Reliance Home Finance aims to increase its book size to over Rs. 50,000 crore in the next few years. We expect the listing and allotment of shares in Reliance Home Finance, free of cost, to unlock significant value for one million shareholder family," Anmol A.Ambani, director, Reliance Capital Limited said in a statement.
Reliance Home Finance Limited (RHFL), which is a subsidiary of Reliance Capital, provides a wide range of home loans, construction finance, and Affordable housing loans. The company has interests in asset management and mutual funds, life and general insurance, commercial and home finance and stock broking and wealth management services.