Anil Ambani is eyeing the Rs 2 trillion worth of stressed assets in the Indian financial system.
Reliance Capital, the non-banking finance arm of the Reliance-Anil Dhirubhai Ambani Group, is ready to float an asset reconstruction company, which will buy stressed assets from the system, and nurse them back to health.
Rajendra Kakkar, former managing director and CEO of Asset Reconstruction Company (India) Ltd (Arcil), will head the venture. Reliance Capital will team up with Corporation Bank, Indian Bank, and General Insurance Corporation for the purpose.
Reliance Capital will hold a 49 per cent stake in the company, while the other three partners will hold 15 per cent each.
"There will be another partner which will hold 6 per cent stake," said a source.
Reliance Capital has already had a round of discussion with the Reserve Bank of India on the proposed venture, which will have a capital base of Rs 100 crore (Rs 1 billion). The company's executives could not be reached for comment.
According to a banking source, two public sector banks and GIC had moved the RBI, seeking its permission to participate in the venture, and Reliance Capital would make a formal application soon.
This will be the second asset reconstruction fund in the Indian financial sector. The existing one, Arcil, was floated by State Bank of India, IDBI, ICICI Bank, and Punjab National Bank.Normally, Arcil buys stressed assets at around 73 per cent discount to their price. Reliance Capital's new vehicle is likely to acquire stressed assets at a steeper discount, as it plans to pay cash upfront.