The Reliance ADA Group, which was planning to launch a $1-billion private equity fund by March 2009, has decided to start operations from January itself, but with a smaller fund size, expected to be in the range of $400-500 million.
"The team is in place. It's a tough market, so we are a bit slow on that.
By January, whatever amount we can tie up, we will and launch. We may not be able to achieve $1 billion, but we hope to reach $400-500 million," said Reliance Capital CEO Sam Ghosh.
Infrastructure, information technology and pharmaceuticals will be the focus areas, he added.
Private equity apart, it is business as usual for other segments in the financial sector, Ghosh said.
Having received permission to expand the asset management business to Singapore and the United Kingdom, Reliance ADA Group is also planning to enter the Gulf market via Dubai International Finance Centre.
In addition, it wants to take its life insurance business overseas. By the end of the year, the group is planning to seek at least one licence in either South-East Asia or West Asia.
"We want to apply in one South-East Asian country and one country in the Gulf. Focus will be on the Indian diaspora, but later we will try to get local business," Ghosh said.
The group has already announced plans to invest Rs 2,000 crore (Rs 20 billion) in Reliance Life Insurance, the Indian venture, to bolster its capital base to around Rs 4,000 crore (Rs 40 billion) and help it underwrite more business.
In the case of Reliance Consumer Finance, which has built up an asset book of about Rs 9,400 crore (Rs 94 billion) compared with Rs 7,500 crore (Rs 75 billion) at the end of the last financial year, the group is awaiting approval from National Housing Bank to spin off a separate housing finance arm and transfer the mortgage portfolio of over Rs 3,000 crore (Rs 30 billion) to the new subsidiary.
"We have to continue business, we cannot slowdown business. But in a market where interest rate and inflation, though coming down in recent weeks, is a bit high, we have to be prudent," Ghosh said.
He added that the focus was on segments like mortgage and commercial vehicles, while personal loans were not a favourite. Reliance Consumer Finance has typically stayed away from personal loans below Rs 200,000, where delinquency levels are high.
"Business for the rest of the year will depend on how the liquidity situation is over the next few weeks," Ghosh said.
But the general insurance business, where the company was focusing on earning profits in segments like motor and health insurance, which face high claims, will see some momentum.
"We have managed to turn around the motor and health businesses. In the first half, the focus was on profitability and that's why we were going a little slow, but now the focus is on growth," the Reliance Capital chief said.
But Reliance General intends to be selective in the corporate business that it underwrites.
A company executive pointed out that a group mediclaim cover will be issued only if Reliance General was getting other business from the corporate clients.