Shares of Reliance Capital BSE -8.55 % on Tuesday opened at Rs 687.40 ex-date, adjusting for the demerger of its home finance business.
Reliance Capital
The housing finance arm will be listed separately on bourses. Reliance Capital shareholders will get a share of Reliance Home Finance for each share of Reliance Capital held as on Tuesday. The company will still hold 51 per cent stake in RHF.
The HFC managed Rs 13,022 crore assets as of June end, is targeting Rs 50,000 crore in assets by FY20,
Analysts noted that housing arm is focusing on retail home loans. Besides, the company has niche in self employed LAP segment.
“Given the huge opportunities in the housing segment, we believe there is immense scope for RHF to sustain/improve growth momentum. The business is currently high growth average margins business. While cost ratios are currently taking a toll on returns, scaling business along with cost focus will help the company improve cost ratios and, consequently, improve returns profile,” Edelweiss BSE 0.06 % Securities said in a note.
Reliance Home Finance reported a 58 per cent jump in total income at Rs 374 crore in June quarter. The disbursements were Rs 2,655 crore during the period under review and the assets under management as on June 30, 2017 stood at Rs 13,022 crore.
The gross non-performing assets ratio was at 0.8 per cent as on June 30, 2017.
Edelweiss which met CEO of Reliance Home Finance (RHF) Ravindra Sudhalkar noted that the company is looking to focus on cost rationalisation along with digital leverage will help cut cost. Besides, is looking to cut cost/income and strengthen credit appraisal & monitoring systems to ensure stable asset quality.
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