After foraying into the telecom space in June 2010,soon after the non-compete agreement with the Reliance Anil Dhirubhai Ambani Group (ADAG) was scrapped,Reliance Industries (RIL) has now decided it wants to play in the fast-growing Indian financial services sector. On Sunday,Indias largest company by market value,announced it had inked a joint venture agreement with DE Shaw Group to establish financial services business in India. Reliance is delighted to partner with the DE Shaw Group in the financial services domain. The DE Shaw Group is a natural partner for Reliance. Together,we look forward to participate in the growing Indian financial services sector, Mukesh Ambani,chairman and managing director,Reliance Industries,said in a statement. Although,DE Shaws expertise lies in the area of investments,such as private equity,and market-making,the announcement is significant since the Reserve Bank of India (RBI) and the finance ministry are currently thrashing out the norms for the entry of new players into the banking arena,by far the biggest and most promising piece of the financial services space. The Central government is clearly keen to allow new entrants even as the debate on whether large industrial conglomerates should be allowed into the banking space continues. The Anil Ambani Group,meanwhile,has not made its ambitions of acquiring a banking licence a secret. It was in May last year that the Ambani brothers decided to scrap the non-compete clause signed at the time of their split in 2005 and which had given the younger brother,Anil Ambani,exclusive preserve over sectors such as telecom and media. Soon after,in June 2010,Reliance Industries picked up a 95 per cent stake in Infotel Broadband Services,the sole winner of a pan-India broadband spectrum licence,estimating the total investment in telecom services at $5 billion including infrastructure and rollout costs. The firm has indicated it may move into the power sector,although no firm plans have been announced. Reliance Industries has virtually doubled its balance sheet in the three years to March 2010,thanks to the investments in the KG-D6 basin and the merger with itself of Reliance Petroleum. In a landmark deal that will boost its fortunes significantly,UK-based global oil major BP recently agreed to invest $7.2 billion in 23 oil and gas production sharing contracts that Reliance Industries operates in India,including the producing KG D6 block. The fresh terms agreed to by the two brothers,last May,say the senior Ambani will not foray into gas-based power generation business until march 2022,though it can operate its captive gas-based power plants. Spreading wings * It was in May last year that the Ambani brothers decided to scrap the non-compete clause signed at the time of their split in 2005 and which had given the younger brother,Anil Ambani,exclusive preserve over sectors such as telecom and media * Although,DE Shaws expertise lies in the area of investments such as private equity,the announcement is significant since the RBI and the finance ministry are currently thrashing out the norms for the entry of new players into the banking arena * DE Shaw group is a global investment and technology development firm. The company has its presence in India since 1996. Its investment activities in the country are spread across various sectors and the firm has over 700 employees in India
