RIL enters financial services business

RIL enters financial services business

BS Reporter / Mumbai March 28, 2011, 0:25 IST

Sets up joint venture with D E Shaw Reliance Industries (RIL) Chairman Mukesh Ambani has finally entered the financial services space. This comes just days before the Reserve Bank of India is expected to announce the draft guidelines for entry of new banks.

RIL today set up a joint venture with the DE Shaw Group to offer an array of financial services, a statement by the companies said, without giving details of the financial terms.

RIL is free to enter almost any sector after the two Ambani brothers ended a pact last year that prevented them from entering sectors where the other was present.

The partnership with DE Shaw will now see RIL compete directly with Anil Ambani’s Reliance Capital.

Sources familiar with the developments said RIL and DE Shaw were likely to build on the existing $800-million (Rs 36,000 crore) fund. DE Shaw has been in many ways following big hedge funds such as Citadel to compete with investment banks by offering diversified financial products. According to sources, RIL’s team is likely to play the lead role, but DE Shaw will assist in areas where it has core expertise. These include energy and carbon trading, energy and carbon derivatives, private equity, mutual funds and other security-linked products. “We would like to leverage DE Shaw’s expertise and offer the entire spectrum of services it has,” said an RIL official, without giving further details.

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